Investing offshore is a very important tool to ensure that your capital is diversified around the globe and protected from the potential depreciation of the Rand against developed market currencies such as the US Dollar over the long-term.
Individuals who prefer to include estate planning and taxation benefits into your offshore investment plan, can then invest into an Old Mutual International wrapper which will be invested in the Isle of Man.
This wrapper is a 5-year investment, but you do have the ability to withdrawal from the account inside the five years (similar to a local endowment policy).
The benefits of a wrapper are as follows:
Tax administration/simplification
- Old Mutual is responsible for all tax reporting obligations
- Old Mutual takes care of all tax calculations and payment to SARS
Lower tax rate and liability
- CGT will be 12% (versus 16.4% if directly offshore)
- Income tax is 0% as all distributions are rolled up
- CGT calculated in Hard Currency (thus not calculated on Rand depreciation)
- No SITUS Inheritance Tax: rate of 40% in US (in excess of $60,000)
- Estate duty of 20% will apply
- No CGT on death
Beneficiary nomination
- No need for Grant of Probate: administration of offshore assets by offshore solicitor
- No need for a foreign will
- Avoid executors fees if a beneficiary is nominated
- Immediate access to capital – beneficiary takes ownership of the investment
- No CGT triggered on death
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