Offshore bonds - Eric?

[Lambojim]

I was hoping the legendary Eric could advise me on something.
With the new tax level kicking in next year is the below a feasible way of minimising your tax liability?

Assuming you have your own UK limited company and have taken the amount you need to comfortably exist/meet your commitments, could you pay money into an offshore bond.

Question 1 - could the limited Co pay it gross rather than than me paying from my post tax wages?

I understand that the bond would accumulate tax free any interest/gains each year, and as I understand it, you can also withdraw 5% of the bond value each year tax free as this is assumed to 'reasonable return of capital' by HMRC.

If I was to be a lower rate tax payer when I cashed the bond in because I had taken a drop in earnings, sold my business etc, I understand that I would pay tax at the lower rate (20%) too?

Question 2 - Is this all correct?

I understand that the charges on these bonds are huge and upfront - does anyone have any ideas about the best providers and how much I should expect to pay?


Hope someone can help.

James

[Eric Mc]

Offshorte tax planning is well outside my sphere of knowledge so I wouldn't even hazard a guess on your particular query.

[Lambojim]

Thanks Lloyd - appreciated.

Is there a tried and tested way of turning some Income into a capital gain and take advantage of the 18% rate, which I agree, looks very generous right now (no doubt it's going to be pulled soon ??

There seem to be alot of bandits operating in the offshore IFA market/tax consultants area, if anyone has used someone they would recommmend, I'd love to hear from them chaps.

[flyingjase]

Lambojim said:

Thanks Lloyd - appreciated.

Is there a tried and tested way of turning some Income into a capital gain and take advantage of the 18% rate, which I agree, looks very generous right now (no doubt it's going to be pulled soon ??

There seem to be alot of bandits operating in the offshore IFA market/tax consultants area, if anyone has used someone they would recommmend, I'd love to hear from them chaps.

There is a bond that a well respected UK mid tier accountancy firm are offering to do exactly this. Set up fees are high (minimum £50k) as it's quite complex. They are currently reviewing the latest budget before they roll this out any further, but it is something that I'm looking at as we speak, as I suspect are quite a few others.

[Lambojim]

Jason,

I didn't think I was alone
Perhaps you could PM me details if/when you hear more?
Thanks

[kryten]

Lambojim said:

There seem to be alot of bandits operating in the offshore IFA market/tax consultants area, if anyone has used someone they would recommmend, I'd love to hear from them chaps.

Have met a few of them whilst searching in the last couple of years!

In any case, most schemes have to be declared to the revenue which seems to be the equivalent of sticking two fingers up to them and going 'ner-ner-ni-ner-ner'.

Whilst they seem not be able to attack the particular instrument in use (though I don't know of any money coming back to the UK from one yet) it does seem to increase the number and depth of enquiries into other business interests by a _huge_ margin...

[flyingjase]

Lambojim said:

Jason,

I didn't think I was alone
Perhaps you could PM me details if/when you hear more?
Thanks

Will do, probably 3-4 weeks though

[Lambojim]

Thanks Jason, much appreciated.

[DanX5]

Hi Lambojim - you have PM, I may be able to assist

Cheers,

DanX5