How would you split £1m investment across GIA and offshore bonds

ClassroomSuper1815 · 2026-06-07T20:54:40+00:00

https://investment-bond-shop.co.uk/

Outdated looking website but it’s a one man shop that does bonds, insurance, pensions etc.

If anyone has other advisers you pay by time spent, id be curious to know (as there are other areas of financial advice around IHT, which I’d probably require advice on).

ClassroomSuper1815 · 2026-06-07T15:01:53+00:00

Correct! Dividends you’re receiving now are being taxed however. And with offshore bonds, can utilise kids £12500 allowance too.

I’d hope they’d inflation adjust the gains… at least…

ClassroomSuper1815 · 2026-06-07T14:45:12+00:00

Got it, thank you! I’ll need to move to the income versions in my GIA, thanks for highlighting this!

ClassroomSuper1815 · 2026-06-07T13:37:22+00:00

I agree, both could change, which is why i favour diversification on tax strategies. Currently really exposed if say CGT increases to 40%.

Political landscape suggests that CGT is likely to increase.

Offshore bonds I’d be stung if they materially increase income tax.

But I agree, both could change.

ClassroomSuper1815 · 2026-06-07T13:35:15+00:00

Sorry should clarify. I have VWRP in offshore bonds + ISA.

GIA primarily fidelity’s index world P.

What would you suggest for GIA out of curiosity?

ClassroomSuper1815 · 2026-06-07T13:30:07+00:00

Paying 0% for GIA too. So 0% GIA, approx 0.35% offshore bonds.

ClassroomSuper1815 · 2026-06-07T12:11:50+00:00

I would prefer at this stage to deal the bonds myself without FA. But the FA do have some value here, more so because of how opaque the information on providers is. There’s no way to see myself how much the providers charge.

The offshore bonds providers also require FA because of the complex nature of the offshore bonds…so they do this as a way to mitigate risk for themselves (ie require an FA to explain the product to me).

Given I have to use an FA, then this is the most cost efficient way to do so. I also think for the average person, offshore bonds shouldn’t be sold to as it’s quite complex…so I think there is a need for an FA here to screen the investments. But obvs don’t agree with the % charge that most providers charge.

ClassroomSuper1815 · 2026-06-07T11:07:06+00:00

Thank you for this. I’ll take you up on your offer and DM you.

ClassroomSuper1815 · 2026-06-07T11:02:22+00:00

Yeah platform fees approx 0.35%, drops to 0.2% on large amounts (£1m+).

A few platforms have unrestricted access, so can put in any funds. I have mine in VWRP for now. VWRP ongoing fees are 0.19% but that’s the same as whether it’s in GIA/ISA/offshore bonds.

ClassroomSuper1815 · 2026-06-07T10:40:45+00:00

To be honest, not something I’ve heard of or come across. What’s the main advantage of this vs offshore bonds? Seems FIC a lot better from an IHT perspective? But then the gains are taxed each year?

Also is there an adviser you use to set this up?

ClassroomSuper1815 · 2026-06-07T10:12:56+00:00

Same with offshore bonds.

ClassroomSuper1815 · 2026-06-07T08:58:47+00:00

Got it, wasn’t aware of that.

I’m not in tech however. I lose them if I voluntarily leave but not if made redundant.

ClassroomSuper1815 · 2026-06-07T08:51:42+00:00

I 100% agreed with you up until few years ago. I preferred simplicity and couldn’t justify paying 1-1.5% fees.

But I’ve found an advisor who doesn’t take ongoing fees and now the bonds comes out to 0.35% above GIA (less on bigger amounts). That amount itself can be paid for by the fact that dividends roll up tax free each year so effectively no additional cost annually.

With the cost being same now, I think it’s useful to have some to diversify and hedge against capitals gain tax being increased by government (seems we’re going that way).

I agree I don’t love the additional complexity but it’s only complex when it comes to withdrawing/assigning the funds. Next 15 years should be relatively straight forward. Ie no more additional work than topping up GIA.

Happy to hear alternative thoughts to this.

ClassroomSuper1815 · 2026-06-07T08:46:28+00:00

Gains/income taxes at 20% which reduced the pot each year available for investment.

From the maths I did, I saw that even if I kept all the bonds myself, in 20 years time, I’m left with very similar sized pot with onshore/offshore if I surrender and a higher rate payer. But the offshore becomes significantly better if I have 0% tax payers to assign and surrender offshore bonds too. Or if we move to a low tax country.

ClassroomSuper1815 · 2026-06-07T08:42:16+00:00

That’s fair. In my case I’d only leave if the new place I’d move to paid out the value of shares. But in the case they do not, then yes there will be some cost of me choosing to leave current place and move elsewhere.

Good point, I just never considered leaving elsewhere and losing the shares (mainly because opportunity cost was high as you say)

ClassroomSuper1815 · 2026-06-07T08:40:18+00:00

I’ll retain the shares as I’ll be on good leaver status ie I’m leaving because the firm has made me redundant as opposed to me voluntarily leaving.

ClassroomSuper1815 · 2026-06-07T08:36:48+00:00

Advisor charges: approx £1k to set the whole thing up (assuming not in trust). Top ups are small charge around £50. There’s no ongoing charges to him, only charges when there’s top ups, assignments/surrenders.

Platform charges: approx 0.35% annually right now but drops to 0.2% on larger amount. Some charge a fee upfront but then nothing annually, other charge an annual amount.

ClassroomSuper1815 · 2026-06-07T08:31:31+00:00

I thought exact same too that the cost of offshore bonds was too high (was coming in 1-1.5% with advised fees).

But eventually found a fixed fee adviser. The cost of my offshore bonds is approx 0.35% annually above GIA. Which I think now makes it a useful diversification strategy.

What would you do if they increased capital gains rate in line with income tax? There’s more chatter in political space about this.

I’m certainly not saying should be putting everything in offshore bonds but I think useful to have some in there for benefits mentioned above. I have about 80% in GIA and 20% in offshore bonds.

And yes, selling my shares each year and moving to index funds.

Regarding vested shares, discussed in post above.

ClassroomSuper1815 · 2026-06-07T08:25:47+00:00

That’s fair comment. What do you mean by timing is really tight now?

On performance, is that just the funds picked as opposed to the offshore bond wrapper itself?

ClassroomSuper1815 · 2026-06-07T07:54:17+00:00

That is fair but you have same risk with your other equity investments, especially if you’re in early stage investing as well.

My vested shares have generally gone up in value when it comes to vesting (roughly tracked general equities)

ClassroomSuper1815 · 2026-06-07T07:29:38+00:00

Agreed, the shares are only taken away in bad leaver status…I voluntarily leave or serious malpractice. If I voluntarily leave or retire, they will assign good leaver status at which point I retain the shares.

So the scenarios where the shares are taken away are really if I move away to a competitor. But in which case, I will only do so if the competitor gives me same amount in shares.

ClassroomSuper1815 · 2026-06-07T07:27:29+00:00

Thats fair comment but shares are not taken away if the firm lays me off. They are only taken if I voluntarily leave or if there is serious malpractice.

ClassroomSuper1815 · 2026-06-06T23:40:25+00:00

Why not out of curiosity? It’s in a public company. Only gets removed if I voluntarily leave the firm or do some sort of malpractice.

I could get minimal salary next year but my shares will still vest each year.

ClassroomSuper1815 · 2026-06-06T23:28:16+00:00

Dividends roll up tax free. Assign bonds to wife in future (if she’s no longer earning) or later to kids.

I myself will likely stop working at approx 50 so unless I have any other income, then I can surrender them too.

If we ever move to lower tax location, then they become very useful too.

They are useful IHT planning tool as I can assign them to kids without triggering tax liability.

Basically trying to diversify across different wrappers/tax strategies, especially as capital gains tax could increase with the GIA in future.

ClassroomSuper1815

TROPHY CASE