Offshore Collectives

Investing in Offshore Collective Funds

Offshore investment vehicles include unit trust, mutual fund or investment company, and may be open-ended or closed. The main reason for being offshore is that the gains from investment are untaxed or very lightly taxed, and that the regulatory regime is not so stringent as in the high-tax countries, where investors and fund owners are based.

Risk & Reward

Offshore funds offer greater returns and often greater risks than onshore funds, however many countries restrict investment in such funds by their citizens, and also restrictions are placed on the marketing of offshore funds to their citizens. The UK's regime, whilst permissive, is still not very flexible. The laws and regulations of high-tax countries in respect of offshore funds are directed not just to limiting the behaviour of their citizens but also to preventing 'money-laundering' and other illicit uses of International Offshore Financial Centres ( IOFCs).

FSA Recognised Funds

These are funds which, although managed overseas, are permitted to market themselves directly to UK private investors. Having the 'FSA Recognised' tag simply means that the UK authorities acknowledge the regulatory regime in the overseas territory is of a standard at least as 'good' as in the UK.

There may however still be higher risk funds which the FSA don't recognise even though they are based in territories with 'good' regulatory regimes.

Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

The value of your investment can go down as well as up and you may not get back the full amount invested.