Offshore bond meaning

FTT holds that OIGs and AIPs arising in offshore protected trusts are not protected foreign source income (Louwman v Revenue and Customs Commissioners [2025] UKFTT 295 (TC)) What are the practical implications of this case? This outcome is adverse for former non-domiciled and deemed domiciled individuals who held investments via offshore trusts, including mutual funds that generate OIGs on sale and bond investments that produce AIPs when disposed of through such structures. In effect, the decision means that OIGs and AIPs arising within offshore protected trusts (under the rules in place up to 5 April 2025) are chargeable to tax on the arising basis, rather than being sheltered until distributions are made and matched to the trusts’ capital gains or benefits. From a tax policy perspective, these OIGs and AIPs ought to have been treated as ‘protected foreign source income’—not taxed as they arise, but only when paid out of an offshore protected trust and matched to capital gains or benefits arising within the trusts...

In this issue: Electricity and gas market regulation and licensing Networks and network connections Renewable energy Energy disputes Air emissions, efficiency, and climate change International energy Daily and weekly news alerts New and updated content Dates for your diary Trackers Electricity and gas market regulation and licensing Electricity Code Modifications Information on all ongoing changes to the Connection and Use of System Code (CUSC), the Grid Code (GC), the System Owner -Transmission Owner Code (STC) and the Security and Quality Supply Standard (SQSS) is now brought together on NESO’s Modification Tracker. The tracker clarifies each modification’s intent, the stakeholders impacted, Panel views on prioritisation, and its current point in the review journey. For more information, see: Codes. Networks and network connections Ofgem launches consultation on TMO4+ connections reform package Ofgem has outlined its ‘minded to’ positions on the National Energy System Operator (NESO)’s TMO4+ grid connections reform package. These indicative...

Banking & Finance—June 2025 case round-up Waller-Edwards v One Savings Bank Plc [2025] UKSC 22 Undue influence—mixed non-commercial transactions—de minimis threshold—Etridge guidance In this appeal, the Supreme Court allowed the challenge unanimously, deciding that a creditor is placed on inquiry—that one party’s assent to the deal may have been procured through undue influence—whenever a non-commercial hybrid arrangement, on the face of it, features a more than de minimis (ie trivial) borrowing component that extinguishes the liabilities of only one co-borrower and so may not be to the other’s financial advantage. Joanne Wicks KC, barrister at Wilberforce Chambers, and Tricia Hemans, barrister at Falcon Chambers, consider the ruling’s implications in News Analysis: Supreme Court holds banks must follow the Etridge protocol where non-commercial hybrid transactions include a more than de minimis surety element (Waller-Edwards v One Savings Bank Plc). This reiterates the Etridge principle in the context of such arrangements, for banks and lenders...

The Offshore bonds and other foreign policies Practice Note sets out what constitutes an offshore bond and a foreign policy, and outlines the potential tax liabilities. It also focuses on several niche topics: cluster policies (also called segmented policies), personal portfolio bonds (PPBs), the treatment of certain legacy policies, and how the foreign policy regime dovetails with the remittance basis and temporary non-residence provisions... Cluster (or segmented) policies In place of one insurance contract, certain providers supply a bundle of policies to a holder—commonly called a ‘cluster’ or ‘umbrella’ of smaller segments. Each policy, or segment, stands as a separate insurance contract. At inception every segment is the same. They may carry an identical base number with a suffix; for example, XP234567/1–100, where 1–100 denote the discrete segments. A single policy document may cover the whole cluster. UK insurers generally can offer clustered arrangements, and offshore bonds are often marketed in this way, though not every product has this feature...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

Practice Note This Practice Note was initially prepared by Christopher Kerr-Smiley, Legal Director at Womble Bond Dickinson, and is now overseen by Lexis+® UK Private Client. Trusts are frequently adopted by private individuals to hold assets, typically to safeguard and manage them for others—most often relatives—though sometimes for the settlor’s own benefit too. Commercial practitioners regularly encounter trusts where one or more parties to a deal they advise on hold property in a trustee role. The legal arrangement created by a trust, however, is not confined to family wealth planning and extends well into commercial practice. Trusts feature across a range of commercial scenarios, including: pension trusts employee benefit trusts unit trusts lending arrangements, for example syndicated loans smaller charities operating through a trust framework See Practice Note: Commercial uses of trusts. The question of how far traditional equitable doctrines permeate commercial contracts was examined in Re Smith; Ticehurst v Harbour Fund II LLP...