Offshore bonds: a versatile tax wrapper for financial planning

60 min read 5 Sep 24

Offshore bonds offer several tax advantages and planning opportunities for financial planners to explore with their clients. On this event, Neil Macleod, Senior Technical Manager and Cat McInally, Investment Specialist, delved into the tax planning angles to consider when looking at offshore bonds and the planning opportunities they offer - such as estate planning and Inheritance Tax (IHT) mitigation, income planning for retirees and tax efficient investing for high net-worth individuals.

This session qualifies for up to 60 minutes CPD accredited by CII, by the end you'll be able to:

  • Describe the tax advantages of offshore bonds, including gross roll up, tax deferred growth and the 5% annual withdrawal allowance
  • Explain how offshore bonds can be utilised for effective retirement income planning, especially high earners looking to optimise tax efficiency
  • Implement estate planning and IHT mitigation strategies using offshore bonds, including gifting and trust arrangements

To claim your CPD certificate, test your knowledge with the questions below.

Write down your answers to each of the following questions and check your answers when you click to claim your CPD certificate on the link below

1. What is the fundamental tax difference between bonds and OEICs?

a) OEICs do not produce income but bonds do

b) Bonds do not produce income but OEICs do

c) Bonds are subject to Capital Gains Tax (CGT) and OEICs are not

d) OEICs are subject to income tax and bonds are subject to CGT

 

2. What best describes the rate of tax within an Onshore Bond?

a) Around 17.5%

b) Between 19% and 25%

c) Up to 20% maximum

d) Exactly 25%

 

3. Top slicing relief benefits additional rate taxpayers…

a) True

b) False

1. What is the fundamental tax difference between bonds and OEICs?

a) OEICs do not produce income but bonds do

b) Bonds do not produce income but OEICs do

c) Bonds are subject to Capital Gains Tax (CGT) and OEICs are not

d) OEICs are subject to income tax and bonds are subject to CGT

 

2. What best describes the rate of tax within an Onshore Bond?

a) Around 17.5%

b) Between 19% and 25%

c) Up to 20% maximum

d) Exactly 25%

 

3. Top slicing relief benefits additional rate taxpayers…

a) True

b) False

Before collecting your certificate, please take a moment to provide us feedback on this session, please email prudential.distribution.team@prudential.co.uk

Complete the form below and we’ll email your CPD confirmation to you. Please use the email address that you would usually use when contacting us.