Financial Services > Investments > Offshore Funds


This description embraces a wide range of investments whose common characteristic is the fact that the fund manager is not based in the UK and so:
YOU DO NOT OBTAIN THE SAME LEVEL OF REGULATORY PROTECTION PROVIDED ON UK-BASED INVESTMENTS.

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The least risky of these schemes are Undertakings for Collective Investments in Transferrable Securities, thankfully known as UCITS for short. Amongst UK based investments, the nearest equivalent to UCITS would be a Unit Trust.

Just to make things easier for everyone to follow there is an alternative name which is SICAV, standing for the catchy phrase Societe d'Investissement A Capital Variable. There is no material difference between one of these and a Unit Trust.

These schemes are based in designated territories where the degree of investment protection is equivalent to the regime in the UK, which is the safest environment for investors in the world.

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An Offshore Fund has the distinct advantage that it is free from most UK taxes for a UK-based investor - until the money is withdrawn from the Offshore Fund, at which point it becomes taxable in full.

The avoidance of tax at source brings the hope of faster growth, but if the proceeds are simply going to be paid back into the UK at a later date there is no tax benefit at all.

This type of investment is only suitable for those people who expect to be leaving the UK, perhaps retiring overseas.

Whilst everyone in Britain complains about the tax regime here, it is actually the kindest of all of those within the European Union and so careful thought is needed when choosing the most appropriate Offshore Fund because the tax consequences in both Britain and the anticipated country at the time of withdrawal must be taken into consideration.