An offshore bond has a number of features that make it a useful tool for many aspects of financial planning.
For UK tax residents, one of the most attractive features of offshore bonds for investors is the way they are treated for tax purposes. An offshore bond grows virtually tax free, unlike onshore bonds, where the underlying funds are taxed every year. (There may be some irrecoverable withholding tax on certain investments made through an offshore bond.)
If you have clients who fall into the higher rate tax bracket, an offshore bond could be a suitable way to minimise the amount of tax they pay on their investment.
It is important to note that any taxation will depend on your clients' personal circumstances and the law relating to tax may change in the future.
For non-UK tax residents, depending on your clients' country of residency a tax liability may arise (such as income tax or premium tax) as a result of investing in one of our bonds. We recommend your clients seek tax advice from you or their local tax authority before investing in one of our bonds.
| Financial Need | Feature |
| Inheritance tax planning | Trusts |
| Saving for university fees | Assignment of segments
5% withdrawal with no immediate liability to income tax (this is also a feature of onshore bonds). |
| Supplementing fluctuating earnings or top-up retirement income | 5% withdrawal with no immediate liability to income tax (this is also a feature of onshore bonds). |
| Long-term planning with investment continuity | Gross roll-up
Investment options |
| Investment flexibility | Open architecture
Option to work with a Discretionary Manager Three currency options |
| Working abroad | Time apportionment relief |
For more information on the benefits of offshore bonds please speak to your Aviva Consultant.
Issued for use by financial advisers only. This information has not been approved for use with customers.
WM56014 09/2010