Offshore Savings Account

Here’s everything you need to know about our Offshore Savings Account ­– key features, how it works, helpful links, guides and documents.

To apply for the Offshore Savings Account, you’ll need to be aged between 18 and 89 and have at least £500 a month, or single payments of £7,500 or more, to invest.

Our Offshore Savings Account is an international unit-linked life assurance policy that you can open in your sole name or as a joint account. It’s a series of 10 identical policies – giving you flexibility on how you withdraw your money.

Choose up to 10 funds from over 150 available in our Canada Life International Core Fund range. These funds cover all the main asset classes and regions. The fund selection can be changed, without charge, at any time.                    

We offer our popular diversified Risk Managed Funds alongside more focused funds. This gives the flexibility to build an investment portfolio to suit your needs and goals.

All our funds have undergone a rigorous selection process to make sure they meet our investment, operational, governance and compliance standards.

What are the risks?

As with any investment, values can go up and down and different types of investment have different levels of risk. You may get back less than you invest and past performance is no guide to the future.

All withdrawals are free of charge.

Regular withdrawals
After 36 monthly premiums or three yearly premiums have been paid, you can make withdrawals. Withdrawals can be made every month, every three months, every six months or every year. The minimum amount you can withdraw is £100. There’s no maximum amount, as long as you keep £1,000 invested.

One-off withdrawals
You can cash-in (surrender) part of your investment at any time. The minimum amount you can withdraw is £100. There’s no maximum amount, as long as you leave £1,000 invested.

5% tax-deferred withdrawal allowance

If you pay tax in the UK and you’ve funded your account with money that has already been taxed in the UK, the 5% tax-deferred allowance feature will be available.  The 5% tax-deferred allowance runs for 20 years from the year an investment is made into the policy, and is cumulative for future years.  5% of each amount invested can be withdrawn tax-deferred, and these withdrawals don’t cause an immediate income tax liability, or interfere with tax allowances or tax credits.  So, you can take regular or one-off capital withdrawals within the 5% tax-deferred allowance, without an immediate liability to tax, and the assessment to tax is deferred to a later date.

This allowance can be used to make payments to your financial adviser.

Cashing in

You can cash in your investment in full, at any time. Although you should always speak to your financial adviser to discuss any tax implications.

You’ll need to pay us a charge for setting-up and looking after the investment. We take this payment by deducting 1.25% from each regular and single premium.

If, for any reason, you stop paying your premiums or cash-in during the three-year minimum contribution period, we’ll need to take the outstanding charges.

Fund charges
Each fund has an investment management charge, which is incorporated into the amount you pay for the fund. This charge varies from fund to fund. For a full list of fund charges, visit our Fund Centre. 

Paying your financial adviser
If you want us to pay your financial adviser, we offer two options:

• We can deduct the adviser charge from your investment before the money is invested
• We can pay your adviser on a monthly, quarterly, half-yearly or yearly basis

You can either pay a set amount, or a percentage of the investment’s value.

The charges for our Offshore Savings Account depend on how your account is set up. You’ll find details of the charges on your personal product illustration, which can be sent to your financial adviser.

Investment growth
We’re resident in the Isle of Man, so there’s no internal tax on the capital growth or income, which our funds generate.

A chargeable event gain may arise if the last or sole life assured passes away, if the whole account or individual policies within it are surrendered, or if withdrawals are taken in excess of the tax-deferred allowance.  Depending on your circumstances at the time, you or your trustees may need to pay income tax when a chargeable event gain arises on your Offshore Savings Account.

It’s important to remember that the value of your investment can go down as well as up, and you may get back less than you invest. The way funds have performed in the past is no guide to future performance.

Inheritance tax
If your account isn’t in a trust, we may require sight of UK or Isle of Man probate when you pass away, and there may be inheritance tax to pay.

By placing your investment in a trust, there are no probate requirements. Once your Offshore Savings Account has been in place for seven years, the amount of your original gift into the trust is removed from your estate entirely, and will no longer be included in your estate for inheritance tax purposes.

Depending on the amount of your original gift into your Offshore Savings Account and the size of the trust fund, there may be a liability to inheritance tax.  This could be when you make the gift, at each ten year anniversary, and when your trustees distribute trust proceeds to the beneficiaries.

Tax rules depend on individual circumstances and may change. Speak to your financial adviser if you need more information on tax.

Explore our trusts and see how they could help you pass on your wealth in a tax-efficient way.

You can use a trust with your Offshore Savings Account. This could mean there are no probate requirements, and may also reduce the amount of inheritance tax that needs to be paid when you pass away.

This account can be used with the following trusts:

• Gift and Loan Trust
• Gift Trust
• Probate Trust
• Excluded Property Trust

Trusts explained. Find out more about the types of trust we offer and how they could help you pass on your wealth in a tax-efficient way.

Tax rules depend on individual circumstances and may change. Speak to your financial adviser if you need more information on tax.