Living and working abroad in this day and age can be extremely inviting. With certain countries offering zero taxes on all income and brilliant weather why would you not pack up move to sunnier and tax-free pastures?
However, for an array of different circumstances, you may wish to return home to your country of origin to be with family or change country entirely. Whatever your circumstances, AI Investment group can help you get all your financial arrangements in order so that it’s a smooth transition.
In this article, we will be looking at the benefits of an OSIB - ‘Offshore Investment Bond’ and why this is a great option for your investment plans moving back to higher tax-paying countries.
An offshore investment bond is a structure available in many jurisdictions. It can be used as an investment plan to have more control when you pay tax and how much you pay. OIB’s also have the potential to grow faster than any other investment that is taxed at source.
Offshore investment bonds are allowed to grow virtually tax-free depending on which jurisdiction you are in with an open architecture feature meaning no limit to what you can invest unlike a pension or an ISA.
Offshore investment bonds are allowed to grow virtually tax-free with no limit to what you can invest unlike a pension or an ISA. You can also withdraw funds at a certain % level over a 20 year period free of any income tax charge in the jurisdiction. Keep reading to find out all the benefits to using AI investment group to help arrange your Offshore investment bond today. You can also withdraw funds at a certain % level over a 20 year period free of any income tax charge in the jurisdiction.
Keep reading to find out all the benefits to using AI investment group to help arrange your Offshore investment bond today.
If you fit one of the following criteria then an OSIB could be perfect for you and managing your wealth
.A future resident of the UK
.A returning expatriate investor.
1. Gross roll-up or “Tax deferral”
What’s a gross roll-up? Also known as ‘tax deferral’,
is a process where tax can be deferred in the UK and other jurisdictions.
2. Time apportionment relief
Any chargeable amount that arises after you return to the UK, (on which income tax is due) will be reduced based on the time you spent in another jurisdiction. Any additional investments you make to the bond, where you are a resident or not will be counted for when you started the contract, reducing the amount of tax due
3. Top slicing tax relief
When you decide to surrender your offshore bond the growth of your investment may be liable to become a higher rate taxpayer. Top slicing relief can help to reduce the rate of taxes charged, by spreading the gains over the years the bond has been held since being a resident in the UK
4. Tax - Efficient withdrawals
Every policy year (for 20 years) you will be able to make tax free withdrawals.
| Up to 5% of your initial premium
| Up to %5 of any additional premiums ( from the year you invested them)
| Unused 5% tax-deferred allowances can be moved forward.
5. Gift assignment
You may also gift your offshore investment bond by assigning ownership to a third party.
6. Placing your offshore bond in a trust
By securing your bond in a trust this can provide you with asset protection, this will reduce your UK inheritance tax, assist with generation planning so your family don’t have to worry about higher tax rates and also remove the need for any probate. Not only do offshore bonds come with great tax advantages they also have other great benefits.
Diversification - Offshore bonds can contain an array of financial assets including investment funds, stocks and sharesAccess to a huge range of investment opportunities- These are not available to every market for retail investors. Opportunity to transfer your existing assets- This also means you can transfer cash premiums.
Speak to our wealth management team today to discuss potential stock interest and shares.
Emily is a 40-year-old Expatriate living and working in Dubai, she was on a contract of 6-7 years which was starting to come to an end.
She wanted to make sure the money she initially invested 3826173.00 DH would be in a tax-efficient, portable offshore investment product which is held within a developed secure and highly regulated jurisdiction.
We recommended Emily used an OSIB (Offshore Investment Bond), as the best solution because of its flexibility and ability to be moved from country to country. She also reaped the benefits of ”gross roll-up” that we discussed above.
Emily was extremely happy we had arranged all this for her and did not think it would be possible. Our minimum investment is 250k dollars so If you’re looking to start winding down your work or you are looking at retirement we have dedicated advisors with experience in both repatriation and pension planning.
