Offshore investments

Offshore investments involve investing your money outside the United Kingdom.  Investing your money overseas provides an opportunity to build upon your savings, as the funds are not subjected to the same regulations they would be in the UK, leaving greater freedom to maximise your returns.  However, it is important to remember offshore investments also offer much less security and are subject to less regulation, should something go wrong.

Investing overseas can give you the opportunity to reach a far wider range of markets than are available to you in the UK and enables you to take advantage of growth in emerging businesses and economies.  Of course the downside is that the investment has the potential to fall at a similarly fast rate.

You need to be aware of the tax regulations relating to income from overseas investments as this can be a pitfall. You are required to declare this kind of income on your self assessment tax return but there are ‘double taxation agreements’ in place between the UK and many other countries, which means that any tax you have already paid is taken into account before our own taxman takes his cut!  Some tax relief may also be available even if there is no double taxation agreement for a particular overseas country.  This is a complicated area where you will benefit from taking some professional advice – either from an IFA or from an accountant.

It is worth noting that while investing your money overseas can be highly beneficial, the minimum investment level is usually considerably higher than it is for UK-based funds.  Investing offshore is often best suited to you if you’re a more adventurous investor who doesn’t mind taking a greater level of risk with your money.  You may want to get some professional advice from an IFA to see if offshore investments are right for you.  Find a financial adviser here.

Questions you might like to ask an IFA…

  • Are these investments affected by the amount of time I spend in the UK?
  • What are the tax implications of this investment and can you help me with my tax return when I complete this part of it?
  • What are the risks involved in this offshore investment, and do they change over time?
  • Are there other tax-efficient ways to invest my money that would fit into my plans?