Independent financial advice – Offshore funds

Take independent financial advice to find out whether you should be investing in an offshore fund

Offshore explained
Independent financial advice may show that you should consider investing in an offshore fund. As well as collective investment schemes set up in the UK, many are set up in other jurisdictions. In UK tax terms these are referred to as "offshore funds". The UK has no taxing rights over such entities, although UK resident investors are chargeable in respect of income from these schemes and gains on disposal of holdings in them. Where the scheme makes distributions each year, the income is generally chargeable as income from overseas possessions.

Tax treatment
When an investor disposes of shares or units in an offshore fund, the tax treatment depends on whether the fund had ‘distributing’ status throughout the period of the investor's ownership of the shares or units. If it had, the normal chargeable gains rules apply on disposal. If the fund did not have ‘distributing’ status for the entire period of ownership of those share or units, special rules apply to treat any gain on disposal of those shares or units as income arising in the year of disposal. In broad terms, a fund has distributing status for a year if it distributes all its income to investors. Take independent financial advice for more details.

Where should I invest?
There are many places around the world offering excellent offshore opportunities. Here we put the spotlight on a few of them.

Guernsey
Independent financial advice might point you in the direction of Guernsey. Its position as a centre of excellence for the provision of offshore financial services is evidenced by the wide range of institutions conducting business on the island and the quality of the Guernsey professional practices upon whose expertise they can call. English speaking, with a centuries-old tradition of political stability and good governance, Guernsey is in the same time zone as London and has frequent air links both to London and to other United Kingdom airports.

Monaco
The Principality of Monaco in the south of France has especially favourable tax laws for companies and corporations. As such it is often used as a base for corporate wealth management Monaco

The Isle of Man
Situated off the coast of North West England, the Isle of Man exists under its own jurisdiction and has particular tax advantages. Independent financial advice reports that the Isle of Man operates a taxation strategy working towards a zero rate for companies, a policy of low taxation for individuals, and no capital transfer, wealth, inheritance tax or death duties.

British Virgin Islands
The BVI's financial strategy has been to diversify from its historical role as a domicile for International Business Companies (IBCs) and into trusts, captive insurance, and funds. Independent financial advice reports that the BVI has been very successful in this diversification.