From offshore bank accounts and offshore savings accounts available in a choice of currencies to the very popular offshore bonds, there are plenty of options for investing outside of the UK.
Offshore bonds can be either a life insurance or capital redemption product. These are generally single premium products which can invest in a wide variety of funds.
Offshore bonds from life companies are similar to their UK equivalents, but as the insurance company is resident overseas, they can provide additional tax benefits for investors.
There are also offshore funds, which are domiciled in countries outside the UK.
These funds, says Darius McDermott, managing director of Chelsea Financial Services, are popular with fund management groups that want to be able to sell the same fund to investors in multiple countries.
“These days they are bought more by UK investors because of the underlying investments - in particular more niche areas like single-country funds - rather than different tax treatment. As more and more platforms are adding offshore funds, they are becoming more commonplace in UK investors’ portfolios.”
Overseas funds can provide specialist funds that are not available in the equivalent onshore jurisdiction, according to Simon Willoughby, head of proposition at Axa Wealth International.
“Of course, these funds can come with additional risk and this must be fully understood by anyone thinking of making an investment.”
Banking was historically the main source of business in these offshore centres.
The banking sector is still important for individuals who are resident outside the UK or who are globally mobile in sourcing financial products and services that are not necessarily available in their country of residence.
Also life companies offer other services, including packaged trust solutions, such as discounted gift schemes and gift and loan schemes, which can help with UK inheritance tax planning.
