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FOR FINANCIAL ADVISERS ONLY

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Life2: Redefining retirement

The concept of retirement today is very different to what it was. It’s a new, exciting chapter in your clients’ lives. The new pension freedoms in the UK reflect this, and are allowing people to review everything to do with their retirement planning. 

If your clients have already fully funded their pension and ISA and they still have money they want to invest, an offshore bond can be a tax-efficient investment to complement your clients’ retirement savings. It could, for example, make an ideal home for all or part of the tax-free cash lump sum that your clients may have chosen to receive from their pension.

WHY IS AN OFFSHORE BOND SO TAX-EFFICIENT?

  • There are no limits to the amount you can invest or the accumulated fund size. In comparison, if the value of your clients’ pension exceeds the lifetime allowance (the maximum amount they’re allowed in their private and company pensions, excluding the state pension), they may need to pay tax on the excess.
  • Clients can reduce the amount of tax they pay by taking gains from their offshore bond at retirement, when their income and corresponding tax bracket are likely to be lower.
  • Our International Portfolio Bond and European Portfolio Bond are based in the Isle of Man and in Ireland respectively. Being based in either of these two jurisdictions generally means your client will not pay income tax on any gains until they take money from their offshore portfolio bond or it comes to an end. 
  • Clients can withdraw up to 5% of their initial premium each year (plus any additional premiums from the year when they are added) without any immediate UK tax charge until they have withdrawn the original value of the premiums paid.
  • Clients can divide their offshore portfolio bond into many segments, which gives them greater control of how they take money from the bond. They can choose to either cash in just some of the segments or take money from across all of the segments in the bond. These two options can give quite different results for tax purposes.

OTHER KEY BENEFITS:

  • FLEXIBILITY
    Clients can start taking money from a bond before their pension income becomes available at age 55.
  • SAFEGUARDING YOUR CLIENT’S INVESTMENT THROUGH A TRUST
    You can help to safeguard your client’s investment by placing their offshore portfolio bond in trust. This can help ensure their wealth is used as they want it to be during their lifetime and beyond.
  • PROVIDING FOR FUTURE GENERATIONS IN A TAX EFFICIENT WAY
    Clients may be able to gift their offshore portfolio bond to another individual, for example children or grandchildren.
  • INVESTMENT CHOICE
    Client can invest in a wide range of assets that can be held in multiple currencies, allowing them to build a portfolio that’s tailored to their needs.

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