Does Your Offshore Investment Policy Cost You the Earth?

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Offshore investment policies can be a great way to boost your wealth if you are an expat. However, timing is key, so it’s always best to arrange your policy before you move abroad. Some policies have been known to come with high fees and penalties that result in next to no return on your investment over a short period of time i.e. 5 years. Here’s our guide to avoiding the traps and getting the most from your offshore investment.

Why do expats use offshore investment policies?

Offshore investment bonds, if arranged by a regulated Independent Financial Advisor, such as Giles Warren, can provide legitimate tax benefits to those living overseas. They are reasonably complex products, but our clients trust us to explain how they work and their advantages and limitations.

These types of products aren’t always suitable for expat investors, and we unfortunately have seen several clients come to us with unsuitable offshore investment policies. We would therefore encourage our clients, existing and new, to consult us before moving abroad so we can help them find the right kind of policy.

What should you watch out for?

Investors taking out offshore investment policies often find that there is a lack of transparency because most jurisdictions are unregulated, unlike UK advisers. Expats are often sold products that can leave them with high charges and early redemption penalties.

Not only do many expats take out policies that are inappropriate for their needs, but they often have no idea what ongoing fees they are committing to when they first take out their bonds.

How to get the most from your offshore investment policy

There’s a simple way to ensure that you don’t fall foul of an inappropriate policy with outrageous charges, and that’s to arrange your policy with a regulated IFA, such as Giles Warren before you move abroad. If you’re already an expat, get in touch with us by email so that we can assess your requirements and perhaps book in a meeting when you’re next visiting the UK.

Offshore investments can provide expats with a welcome boost to their wealth and, when allocated correctly, can help to save tax and boost your wealth. However, we would recommend using a regulated IFA with the job of arranging these complex products for you or you could find yourself lumbered with a policy that has high early redemption penalties and is taxable when you return to the UK.

The value of investments can go down as well as up and you may get back less than the amount invested.

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