Offshore investment is the keeping of money in a jurisdiction other than one’s country of residence.
If you are considering making some offshore investments but have never looked into it before, you might be surprised at the opportunities available.
Tax is the first thing that springs to mind, as reducing one’s tax bill is what triggers most people to look offshore. However, it is not as simple as finding a jurisdiction that is generous to non-residents and moving your money or assets there.
Firstly, since the legal judgment was handed down in the Gaines-Cooper case in 2010, it is essential to get the issue of residence clarified, particularly if you are a UK citizen. HM Revenue and Customs historically used the rule that anyone who spent less than 90 days in Britain was not resident for tax purposes. However, the Gaines-Cooper case seems to have moved the goal posts and instead of being able to determine your residence by looking at your diary, the taxman wants to ascertain which country is your “centre of gravity”.
This concept may be difficult to apply without professional advice and as the consequences of getting it wrong could be expensive. You need to determine your residence before either you or your money moves anywhere.
Aside from the tax advantages of investing offshore, if you are open minded about where your money or assets are held you will benefit from an array of choice when selecting a product. If you are planning to invest money abroad for the long term, you will be looking for a destination that is well established, stable and well regulated. This explains the popularity of Crown Dependencies like Jersey, Guernsey and the Isle of Man. Notwithstanding the small geographical area that these islands cover, financial institutions of all kinds operate out of them, offering virtually any product you should care to name.
Finally, in addition to the choice and tax advantages of investing offshore, you may also benefit from the privacy that offshore investing can afford. Whilst interest from some savings products may have to be reported to your resident tax authority, other products can be kept confidential
For some, investing offshore is advantageous, for example:
- Where a parent has provided capital to a minor
- For individuals who can expect their marginal rate of tax to fall (perhaps in anticipation of retirement or becoming non-resident in the UK)
- Investors entitled to an age related allowance
- Expatriates investing to mitigate UK tax while non-resident
- Companies investing corporate funds
- Investors who are trustees
The Financial Conduct Authority does not regulate offshore investments.
The value of investments can fall as well as rise. You may get back less than you invested
How can we help?
If you have any questions or would like to arrange a meeting to discuss your investments, please give us a call on 01423 223 640. Alternatively, you can complete the online enquiry form and we will give you a call to discuss your requirements.