Offshore portfolio bond - HMRC rules

[Harris_I]

I can't seem to find a simple answer to what I thought was a simple question.

I'm a British national, currently non-resident, but planning to return to the UK having been away for many years. As part of my tax planning I'm intending to open an offshore insurance bond from which I can extract up to 5% per annum for 20 years after I return later this year.

I am getting two conflicting pieces of advice from financial advisers: one says I must set up this bond before 5 April in order to ensure it is tax protected after my return (approximately in August), the other says providing I open the account whilst I am still non-resident (ie anytime before August), it will be tax protected. Who is right?

Thanks in advance,

Harris

[TFP]

Some of your terminology is not quite right, but broadly, I can't see any significance in the date at all.

I assume that you have a tax adviser ? If not, you should probably get one !

[Harris_I]

Thanks. Would be grateful to know the correct terminology.

Am planning to be in the UK late March/early Apr and will be speaking to a tax adviser then, but meanwhile need to know if I am making a critical error by not setting up this offshore bond before the trip.

[Harris_I]

In fact, do you have any recommendations for a tax adviser who can field questions from overseas?

[TFP]

I recommend Eric, who is on these boards and is generally on the money.

[Eric Mc]

I know my limits

This would be quite a specialist area and I would admit an area I am not too clued up on. A chap who goes under the name LC23 often makes good contributions on overseas tax matters.

[sumo69]

Whilst I have non-UK tax resident clients, I wouldn't offer an opinion without seeing the full details of the product.

What I would say is that a good IFA would not only be able to sell the product but also know the tax consequences - certainly the one both I and a number of my clients does.

If you want details, Pm me.

David

[ellroy]

As far as I'm aware the date of inception, and your then residence are immaterial.

It is the date of redemption and your then residence that matter.

I.E. when you take a withdrawal in excess of the 5% per annum tax deferred allowance a chargeable event will have occurred and you will then be liable for tax assessment. If resident in the UK you will pay tax at your marginal rate of income tax in that tax year.

[Harris_I]

Thanks guys. David - I will send you a brief PM.

[sumo69]

I have your message and will try to get hold of my IFA tomorrow and get back to you.

David