For those of us who are concerned with expat finance, utilisation of the term offshore simply means investing in jurisdictions which are exempt from the same taxes applied in an onshore environment. The benefits of using offshore jurisdictions include:
- The very best in international wealth management;
- high levels of statutory protection;
- vast choice and tailor made solutions based on an investor’s individual circumstances;
- accessibility – offshore investments are perfect for those with a transient lifestyle who are committed to living and working abroad
- flexibility of access to your savings and 24-hour secure access to valuations online
There are a number of locations utilised by the offshore financial institutions with whom we work, and the 2 major ones are Guernsey and the Isle of Man. The benefits of both are summarised below:
Guernsey is a premier offshore finance centre, offering a stable and well regulated environment to aid in the realisation of investment objectives.
Protection: Guernsey law requires that 90% of a life company’s liabilities to policyholders are held in custodian trusteeship with an approved independent third party, with no upper limit.
Opportunity: allows investment growth to be higher than simple deposit rates without unacceptable risk and without relinquishing control of your assets.
Tax-efficient environment: Your investments are without liability to Guernsey tax. The gross value of benefits is paid in full and there are no restrictions regarding how and when you may take your benefits.
Freedom: Guernsey enables the movement of funds in all major currencies, as there are no exchange controls.
Isle Of Man
As one of the world’s leading offshore financial centres, the Isle of Man offers:
Tax exemption: Institutions that are based in the Isle of Man enjoy the ability to offer exemption from corporation, income and capital gains tax, and as a result all client funds grow tax free. No Isle of Man tax is deducted when funds are withdrawn from an Isle of Man authorised institution.
Policy holder protection: Isle of Man institutions are covered by provisions of the I.O.M Life Assurance (Compensation of Policyholders) Regulations 1991. Under this legislation, policyholders would receive compensation of up to 90% of their accrued or intended benefits in the unlikely event of an authorised company being unable to meet its liabilities. Unlike many compensation schemes there is no upper limit on the amount payable, and policy holders are protected wherever they are resident.
Confidentiality: In addition to the security provided by the regulatory framework, dealings in the I.O.M. are conducted in an environment that respects the rights of an individual to carry on their business affairs in private. Unless otherwise required by I.O.M. authorities of law, none of the institutions will release details of client affairs to third parties, including tax authorities.
Stability: The I.O.M. enjoys exceptional political and economic stability, as exemplified by a history of over 1,000 years of continuous parliamentary government – the longest unbroken period of government in the world.
A small and adaptable jurisdiction, Gibraltar has responded well to the financial crisis with a robust, diversified and thriving economy. The signing of eighteen Tax Information Exchange Agreements has resulted in the OECD white-listing the territory whilst the recent fiscal changes mark and complete a long journey from offshore tax haven to mainstream European financial centre.
Gibraltar is a self-governing parliamentary democracy. It joined the European Union in 1973 under Article 299 (4) of the treaty. Being under the dependency of the UK, all EU legislation is separately adopted into Gibraltar law. This therefore gives the advantage of providing a firm EU based business legal infrastructure.
All fiduciary entities including banks,Trust companies and other regulated businesses are monitored and registered with the Gibraltar Financial Services Commission (FSC) which regulates to the highest EU standards equivalent to that found in the UK.
Since 2004 the Finance Centre Department continues to compile Gibraltar’s portfolio investment position for submission to the IMF.
Gibraltar was reviewed by the Financial Action Task Force and classified as a co-operative jurisdiction in June 2000.
Gibraltar was the first offshore financial centre to introduce all crimes money-laundering legislation. It was among the first wave of countries and territories to be granted Qualified Intermediary status by the United States Internal Revenue Service in October 2000.
Gibraltar has probably experienced one of the most robust and comprehensive periods of HMRC review. So much so that HMRC has fully acknowledged Gibraltar Trustees’ patience during discussions between the Gibraltar Government and HM Treasury since 2009.
Gibraltar also offers compelling tax and estate planning benefits for wealthy private individuals considering a new country of residence. Whether this is for personal tax restructuring, estate planning or simply to change lifestyle there are significant benefits to be gained from becoming a Gibraltar resident.
With a new attractive fiscal regime Gibraltar is fast becoming the favoured jurisdiction for wealthy private individuals and businesses looking to reduce their overall personal or corporate tax liability in a perfectly legitimate way.
Understanding more about the offshore locations where financial institutions are based and how they operate is a large part of what we do, and we advise our clients according to which route is best for them. For more information about any of our services just get in touch via our Contact page.