Investment Bonds & Trusts

[Mutts]

We've been advised to invest in a non income producing EU bond held in trust, which would be free from tax. Access to funds is by loans.

I'd be interested to hear from anyone who has taken this course, specifically adequate management of funds, administration, costs both set-up and ongoing, and dissolution of trust should circumstances change.

Many thanks

 

 

[Benjamin]

These are very specialist and sophisticated investment devices and I am not qualified to answer your queries but I would have expected that all of your questions should be answered in the prospectus/literature that you should have been given by the person offering to sell you these products.

You should pay special attention to the laws of the country where the trust is written and, if you are tax resident in another country, you should give consideration to their tax regime and laws also.

 

Benjamin

[gas]

[quote]We've been advised to invest in a non income producing EU bond held in trust, which would be free from tax. Access to funds is by loans. I'd be interested to hear from anyone who has taken this cour...[/quote]

We invested in bonds when we arrived last year. In our first year we got a guaranteed rate of 4.5%, and last january the rate was 3.5%. Each year they declare the rate in advance. Caisse D'Epargne.

In November they will tell us the rate for 2006.

 

If you do not access the bond for 10 years the income is tax free, before that a sliding scale exists, thus after 8 years the effective rate of tax is 7.5% on the income earned.

 

Hope the above helps.

 

Do ask how much commission the bank or broker is charging, they can charge up to 3.5% of the bond. The rate is not set in stone and is negotiable, we got a rate of half a %.

 

[LesLauriers]

Gas, this sounds like an Assurance Vie, the tax free allowance is 4600€ per person after year 8, sadly it is not all the interest. Social charges at 11% apply and you can either pay witholding tax or tax at your highest rate which could be lower.

The interest rates quoted are for Fonds en Euros I believe.

Do please correct me if I am wrong.

[Mutts]

Thanks for the input. I think Leslauriers is correct regarding the information from Gas. Benjamin's point re taxation advice is good and I'll be following up on this.

Thanks again

 

 

[Richardk]

Hi Mutts  -  offshore trusts whilst being resident in France is a tricky one as the tax authorities do not formally recognise trusts. It's one of those situations whereby you'll probably be fine, however, as they are not recognised you are also on dodgy ground. We looked into them a couple of years ago as they seemed good investment vehicles if you had a lump sum you could put aside.

I always read on this forum 'get professional advice' but personally accept that there is a step before that...i.e. fact finding. I think I still have some stuff on this if you would be interested in me sending what I can to you, or at least pointing you to a very helpful offshore company we spoke to.

Richard