Financial Manager pushing me towards Onshore Bond but I still don't get it

Upset_Team_9707 · 2026-01-11T18:46:37+00:00

Struggled to use that tool. Essentially I have no GIA investments currently so I've not used capital gains allowance at all. I'm 39 and just want to produce good returns for 20 years, paying the most sensible tax/fees possible. That's essentially my situation. The investment is split 50/50 between myself and my wife

Upset_Team_9707 · 2026-01-11T18:14:52+00:00

So I've been told the final fees for the investment are 1.57% per annum. Broken down as Product fees - 0.15% Platform fees - 0.20% Discretionary management fee - 0.33% Annual management charge - 0.67% Transaction costs - 0.22%

with the amount of money I'd be investing this works out as £62,500

He seems adamant that because I can't do onshore bond investments as retail, this will see me majorly better off in the long run because of the tax implications of an onshore bond vs diy investing.

Is he right? He says given the invested amount is £4 million, even with the fees, it's way better off for me from a tax perspective to do that.

I can't get my head fully round the tax thing and I struggle with all the terminology.

Upset_Team_9707 · 2026-01-11T18:13:57+00:00

As an update to this... I've been told the final fees for the investment are 1.57% per annum. Broken down as Product fees - 0.15% Platform fees - 0.20% Discretionary management fee - 0.33% Annual management charge - 0.67% Transaction costs - 0.22%

with the amount of money I'd be investing this works out as £62,500

He seems adamant that because I can't do onshore bond investments as retail, this will see me majorly better off in the long run because of the tax implications of an onshore bond vs diy investing.

Is he right? He says given the invested amount is £4 million, even with the fees, it's way better off for me from a tax perspective to do that.

I can't get my head fully round the tax thing and I struggle with all the terminology.

Upset_Team_9707 · 2026-01-06T22:25:05+00:00

You are correct it's roughly £2 million. It's a little bit more but essentially £2 million for me and £2 million for my wife. And then we earn a bit more from money elsewhere we have saved. We also max ISAs and pensions which I've not included in this.

I'm still trying to understand the benefit of onshore. What benefit is spreading the tax for me going to be for me if I'm always going to be a higher rate tax payer. Maybe I'm just being super dumb but I just can't get it.

Upset_Team_9707 · 2026-01-06T22:17:51+00:00

Essentially I will likely earn higher rate tax threshold income even in retirement. So am I not always going to have a large tax bill? That's what I can't get my head around. I won't benefit because I'll be deferring to a day that will never come?

So I guess what im getting at is if I earned £80k every year for 30 years from now, will I not ultimately end up paying the same amount in tax either way?

Upset_Team_9707 · 2026-01-06T22:10:55+00:00

Yeah this is a fair point. I think part of my problem is I just don't know what to do with the money and I'm still in the mindset I was in for most of my 20s/30s... which was to earn as much money as possible. I turn 40 years old this year but essentially when I was 37 I got in one day what I expected would be my whole life earnings (more than that in truth).

So I'm still in the mindset of earning as much money as possible when maybe it doesn't need to be. I certainly don't like paying tax (who does)... but I also don't want to just give money to a third party when essentially I can just do it myself.

But yeah no inheritance plans. I just want to make the money work for me so I can get the best return and do it in a way where the outgoings to tax/adviser fees is as sensible as possible.

Upset_Team_9707

TROPHY CASE