Tax Planning for High Earning Insurance and Reinsurance Executives - Offshore Investing (Approved by HMRC)

capital* www.capital.co.uk Tax planning for high earning Insurance amd Reinsurance Executives – offshore investing (approved by HMRC) Offshore investment could help high earners legitimately protect their capital from the taxman in a number of ways. Offshore investment - investing in an offshore tax structure, known as an investment bond, domiciled in a different If you're earning over country - is a highly effective way of £100,000 a year, high tax rates are a major drain reducing many different on your resources. tax liabilities. By offshore, we don't mean far flung tax havens like the Cayman Islands, but more prosaic tax efficient centres like Dublin and the Isle of Man. As exotic and exciting as offshore accounts sound, most providers are household name UK investment and life assurance companies using their offshore subsidiary company. These products are fully HMRC-approved. Find out more... Go offshore As long as there is a life assured on the offshore investment bond you won't normally pay any tax on growth. Tax can be deferred until money is taken out of the bond and will be based on your circumstances at that time; for example, you may wish to draw in retirement, when you are no longer a high rate taxpayer. £ £ 5% 25% International bonds have an annual 5% allowance that you can For example, if no withdrawals are made in the first four years, take out of the offshore investment each year 25% of the amount invested can and defer any tax due until a later date. This be taken in year five without triggering a tax charge. allowance can be carried forward to a future year Source: Fidelity if you have not used it. Nothing to Declare Tax only becomes payable if... You exceed the 5% allowance of the original You sell your bond. offshore investment, for each year it's been running The bond comes to You cash the bond in and an end because the make a profit. life assured dies. Keep it in the Family If your partner is a non-taxpayer it can be tax-efficient to have an offshore investment in their name. Also, if the bond is assigned to your partner, or children, inheritance tax on your own estate may be avoided. Careful tax planning meant 250,278 estates for year of death 2009-10 were fully mitigated against tax 38,144 of these were for estates worth between £500,000 and £2 million source: HMRC, July 2012 If you put the offshore bond in a specific type of trust, it may be possible to remove it, as well as all investment growth, from your estate, and so save a 40% tax charge. Sources: Prudential Fidelity Your 'to do'list Don't Take Protect pay tax on growth 5% a year without your family from being taxed inheritance tax. capital What is Intelligent Investing? Download our free eGuide What is Intelligent Investing™? now! TM The nfomation provideddoes not constitute financial or otherprofess ional advice You shoud consulta profess ional adviser ifyou require financial advice Disclaimer We try to ensurethat the information provided is correct but we do not give anyexpress or impliedwarranty as to its accuracy We donot acceptany liabity forerrors or omiss ions We are not liable for any damages (induding, without Imitation, damages forloss ofbusiness orloss of profits) arising in relation to the information provided or from any action or decision taken as a result of us ng the information orwebs itelinks. The materials provide links toother sites. We donotcontrol thelinked sites and are not respoansible forthe contents of anylinked site or any link in alinkeds ite, oranychanges or updates tosuch sites. Weprovide these Ilinks toyou only as a convenience, and the indusion of anylnk does not imply ourendorsement of the site O Capital Asset Management2013 Some information has been provided by thirdparties We arenot responsible for any error, om ission or inaccuracy in the material