A potential new client (a UK trust) has invested part of its trust fund in a stocks and shares portfolio via a financial institution in the Isle of Man. A consolidated tax certificate from the UK based investment manager states the portfolio to be tax resident in Ireland. The client was advised there are tax advantages to this arrangement but has not been able to tell me what they are. What tax advantages might apply to this arrangement compared to having a portfolio invested directly with a UK investment manager?
What precisely is the involvement of the Isle of Man institution in the mix?
Paul Storrie
Storrie and Company
I do not know exactly. I was wondering if this was some way of offshoring part of the trust fund but I have not come across this before and do not understand how this may work to the advantage of the trust.
If the IoM institution is a life assurance company, they may offer a single premium bond life assurance policy wrapper for such a portfolio (for example Utmost (formerly AXA) on the island offer such a facility) and this would change the tax treatment of the portfolio amongst other things (for example, such a bond is non-income producing). If the underlying portfolio is highly personalised (as this one appears that it might be) then the bond would be subject to the Personal Portfolio Bonds (Tax) Regulations.
Paul Storrie
Storrie and Company
The IoM institution is a life assurance company. Your other comments are also consistent with the information that has been supplied to me. I will have to look up the PPB Regulations that you mention.
Thank you
Andy