Offshore bonds are increasingly being turned to by some of Britain's wealthy investors, as a means of mitigating the impact of punitive new pension taxes and to aid with inheritance planning. Experts from international insurer and pension planner, Legal & General (L&G) have said that the business they are generating in offshore bonds has soared over the last three months, with other major pension companies indicating similar trends. The reason behind the bond surge is the limit of £50,000 put on tax-free deposits into pension accounts. The limit means that investors are now looking for options to help to minimise the effects of even more taxes on their money. Danny Cox, pension expert from Hargreaves Lansdown, said that the limit will not affect many people in the UK, but a lot of people in the 50 per cent tax bracket are feeling the impact. "This limit is still clearly more than most people can afford to save each year," he explained. "But it does mean that once high earners have maximised their pension and Isa contributions, then offshore investment bonds become an option."David Fagan, from Legal & General International (Ireland), said that offshore bonds were proving to be a very tax efficient way for high net worth individuals to hold their assets for the future.
http://www.50percenttax.co.uk/index/2011/11/8/high-earners-opt-for-offshore-bonds-to-mitigate-pension-taxe.html
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