Offshore Bonds Flashcards
(9 cards)
What are investment bonds?
Life assurance policies allowing for investment in funds
Can be either onshore or offshore
What tax is charged on onshore bonds?
before a chargeable event
20% on income and gains
subject to further tax after a chargeable event
What tax is charged on offshore bonds?
The fund grows gross (no tax)
Until a chargeable event where marginal income tax is charged
What special tax treatment to both onshore and offshore bonds get?
5% tax deferral
5% per year - cumulative
What triggers a chargeable event?
D - Death
A - Assignment for cash
M - Maturity
E - Exceeding 5%
S - Surrender
Who are onshore bonds most suitable for?
basic / higher rate payers seeking more simplicity
What are offshore bonds most suitable for?
Higher / additional rate payers who plan on being:
1) non-res
2) basic rate
What is the main investment benefit of an offshore bond
Gross roll up allows for maximum compounding
higher long term growth potential
