offshore bonds

Leyton · Post by **Leyton** » Sat Jul 17, 2004 11:13 am

Hello,

Is this the right forum to post this question on???

I have been advised to transfer my assets into an offshore bond by a friend who is a UK resident. However, as I am a Portuguese resident I do not know what the tax implications of this product would be if I made any withdrawls from the bond (I know there would be no capital gains tax to pay).....

I was just wandeing if any of you financial gurus knew without me having to be blinded by one of these finance companies over here .-.

Sorry, I know it's a heavy boring question for a Saturday but one must look after ones nest egg

Regards Leyton

Guest · Post by **Guest** » Sat Jul 17, 2004 4:29 pm

yikes!!!! i hope your friend is ok...you want to transfer YOUR ASSETS into an offshore bond held by a friend...well im no accountant but i can think of some phrases "bargepole" "6 foot" "dont touch" come to mind.

really you must go and see your bank manager or some other professional person

bica · Post by **bica** » Sun Jul 18, 2004 6:08 am

Suggest you look back through the many threads in the property owners forum

Leyton · Post by **Leyton** » Sun Jul 18, 2004 10:59 am

Hi Bica,

I have looked back on the property forum, however all discussions there refer to offshore companies which is a different proposition alltogether.

It is not the house that I wish to place in an offshore company but my assets (what little I have) into an offshore bond....

Thanks for the suggestion anyway.

Regards

Leyton

bica · Post by **bica** » Sun Jul 18, 2004 11:37 am

Well in that case I suggest you have a look at www.sovereigngroup.com

I know that you said you did not want to be blinded by financial wiz kids but this is Biffa's company and If you look at advice he has given on this forum in the past, he puts it over in an easily understood way (even me a Portuguese water dog can understand) .

L8ters

Bica

Guest · Post by **Guest** » Sun Jul 18, 2004 1:21 pm

well leyton...if you have so few assets ..why do you need to put them "offshore"?...you reallly must go and see your bank manger.

all i can say us if i were in your shoes, i would tread very very very carefully.

hopalong · Post by **hopalong** » Sun Jul 18, 2004 5:56 pm

Leyton, curiousity got the best of me and I am wondering why you want to buy off shore bonds. You did not mention for what purpose you want to go off shore to invest your assets. Is there some tax benefit or estate planning benefit involved in these bond? Is the rate of return high enough over domestic bonds to take on the added risk. In the past I have invested in international bond mutual funds, although the rate of return was very good, the unit price of the fund fluctuated quite a bit, making for some sleepless nights. I don't know if we are talking apples for apples, but I wonder. When I hear someone wants to go off shore to invest I assume they are looking for a way to avoid tax in the country they reside in, or am I wrong here...would like to know...regards from "the hindsight investor".

Leyton · Post by **Leyton** » Mon Jul 19, 2004 9:43 am

Hi Hopalong,

I don't think I explained myself very well in the original post for which I apologise.

An offshore bond (or personal portfolio bond)is in effect a life policy issued by an offshore insurance company whereby you can transfer your personal portfolio (the premium) (or buy funds from the life company)to the life company in return for a policy on your life.

The benefits are that your portfolio is then sheltered from income and capital gains tax. You can also defer paying tax on withdrawals until you choose. Basically it's an international ISA sheltering your gains from the tax man.

I am vagouely aware of the effects on tax for a uk resident but not a Portuguese resident...

I hope I have explained myself a bit better

Thanks

Leyton

hopalong · Post by **hopalong** » Mon Jul 19, 2004 11:13 am

Thanks for the reply leyton...good luck on threading your way through the Portuguese tax system...I'm sure it is as complicated as it is here in the states.

Guest · Post by **Guest** » Mon Jul 19, 2004 4:09 pm

Leyton....You are completely correct plus you can take out 5% per year Tax free...ie you can take your capital and roll up the interest...and yes because this is in effect an insurance policy the company is not transparent as Banks now are...and yes you should over the medium term do better than sticking it in a Bank.....But.....WHO can give you and me the final to questions.....
* Where do you stand as a Portuguese (I dont Know) AND...as I also have one but I am British but living in Portugal....where do I legally stand....(Im still a UK Tax payer)...

Very good question ???