Bonds Offshore versus Bonds onshore
Written on 17/05/2024

Offshore bonds vs Onshore bonds

Insurance bonds are not the force they once were in our industry, but a few IFAs use them, and understand them properly, and there are some critical advantages that they will be well versed on.

In addition it is notable that offshore bonds also have key advantages over onshore bonds. 

  • The remittance rules for UK resident non-UK domiciled individuals do not apply to offshore bonds. Therefore, provided the capital invested into the bond is clean (no unremitted interest or gains) then no income tax is payable until a chargeable event occurs and there is no CGT payable.
  • Using multiple lives assured for a life assurance contract can avoid a chargeable event on death of the policyholder.  Put the bond offshore and add multiple family members onto the lives assured  ensuring ownership passes seamlessly down the generations. 

In an increasingly international world, foreign trustees, and UK resident trustees moving abroad will become more important, giving some juicy opportunities to cash in while not liable to UK tax, and take proceeds tax free.

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