Why Offshore Bonds Are So Tax Attractive for Expatriates

Did you know that you’re not taxed immediately on an income of up to 5% that you can draw down from an offshore bond?  It’s true – and that’s just the first reason why offshore bonds are so tax attractive for expatriates.

In this report we’re going to introduce you to the wonderful world of offshore bonds!  And we’ll look at how they could be the key to your savings and income needs.  If you have a nice lump sum to squirrel away but you’d really benefit from earning at least a small income from it, an offshore bond could be not only ideal – but too tax attractive a proposition to pass up.

The super wealthy are often well aware of the benefits of offshore bonds thanks to the fact that they are more likely to make use of wealth advisers and the like – but for us expatriates, we’re often left in the dark about solutions that are at least as beneficial for us.  But never fear, we at Shelter Offshore are here to tell you about the expatriate advantage and every aspect and element related to it.

Offshore bonds – also known as investment bonds that are run by life insurers are considered so secure and reputable that even the British taxman allows onshore Britons who use them the right to defer taxation on any income drawn down from them.  This means that for an expatriate who is concerned about structuring their investment portfolio for maximum flexibility, who is concerned that their work commitments or lifestyle may bring them back onshore in the future can commit to an offshore bond knowing full well that their status will not be altered if they repatriate.

For an expatriate who wants to earn an income from their savings and investments – such as someone overseas who’s retired or semi-retired, an offshore bond can make maximum sense.  As stated, you’re allowed to take 5% in the form of an income and you don’t have to pay tax on that draw down immediately.  You defer the taxation until the point at which the bond is cashed in.  And if you think about it, if you’re living in a nation where your overseas income and gains are not taxed, you could potentially have earned all your income tax-free.  Alternatively, if you’re going to retire to such a country, you could wait until that time to en-cash your bond.

An offshore bond can also be used very effectively by those in a higher tax bracket – they can defer the payment of tax to the point at which they are in a lower tax bracket – such as when they retire of have a lower earning year for example.  Clearly therefore, when it comes to tax effectiveness and attractiveness as well as investment and earnings flexibility, an offshore bond is quite possibly one of the most useful tools for many expatriates.

As always, the suitability of such a product for you personally will depend on your own circumstances and these will need to be reviewed in light of any produce considerations before you take any action with your money.  Get it right and an offshore bond will be your tax efficient friend – get it wrong and you could have tied your money into something that is absolutely wrong for you, your objectives, your tax status and so on.

Our advice is to get advice, and to that end we offer a free advice service to all our readers…