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 Services Authority does not regulate offshore
investments.
If you have any questions or would like to arrange a meeting to
discuss your investments, please give us a call on 0113 234 5528 or
complete the online enquiry form and we
will get back to you to discuss your requirements.