If you are planning on moving abroad, an offshore bond could give you extra flexibility and control over the tax you pay.

Any liability to tax is calculated when you cash in your bond or make a withdrawal, so you can choose to take any proceeds either in the UK before you move or in the country you are moving to - whichever has the most favourable tax rules for your situation.

Offshore bonds also stop you from being taxed twice. As any investment growth is virtually free of tax*, you only pay tax when you cash in the bond or make a withdrawal. What's more, if you plan on living outside the UK for any period between the start of the bond term and the time you cash it in you could benefit from Time Apportionment Relief, where the amount of tax you pay is reduced to take into consideration the length of time spent outside the UK. Compare this with an onshore bond where you still pay tax on fund growth even if you are out of the country.

Your own tax liability will depend on your individual circumstances and where you reside when you cash in your bond or make a withdrawal. If you are planning on using an offshore bond in this way you should seek financial advice in the jurisdiction you are resident in when you cash in the bond.

*Irrecoverable withholding tax may be payable on certain investment funds, as in some countries withholding tax is deducted from dividends and interest payments. If you invest in a net fund, where tax is paid on returns within the fund, where possible Standard Life International will reclaim tax within the fund and return this to you. We may not be able to reclaim tax if there are changes in HM Revenue & Customs practice.

Please remember that with an offshore bond, the value of your investment can go down as well as up and you might get back less than you paid in.

All of the information on this website relating to taxation is based on our understanding of law and practice in Ireland and the UK as at November 2009. The future tax position of the bond or your own tax position may alter. The tax information given only applies if you are resident in the UK for tax purposes. If you are no longer resident in the UK for tax purposes, please contact your financial adviser for more information.