New avenue for direct offshore investors
The launch of Old Mutual International’s Investment Portfolio today gives investors greater flexibility and wider access to offshore investments. This is the first time that Old Mutual International will be selling a product based in the Isle of Man.
Designed in collaboration with Royal Skandia, Investment Portfolio was designed specifically for the South African investor who wants to use their R4 million direct offshore allowance and the additional R1 million discretionary offshore allowance.
”The design of a product like Investment Portfolio was made possible by the exciting synergies within the Old Mutual Group,” explains Wayne Sorour, head of Old Mutual International. “It demonstrates not only our capabilities as a Group, but our ability to easily transport these capabilities across the Group and across the globe.”
Investment Portfolio allows investors to consolidate, hold and manage their offshore assets in a single, tax-efficient life wrapper. These include collective investments, bank accounts and stocks and shares quoted on recognised stock exchanges, fixed-interest securities, multi-currency deposits, and hedge fund of funds, structured notes, exchange-traded funds and other alternative investments.
What is the sizzle in the steak for the investor?
1. It’s an opportunity to invest offshore TAX-FREE. In South Africa domestic sinking funds are taxed in accordance with Section 29A of the Income Tax Act. (four-fund approach) However, due to the relationship between Old Mutual Life Assurance Company (South Africa) (Pty) Ltd and our Reinsurance company, there is NO tax in South Africa in respect of returns earned on behalf of the contract holder. In essence, any returns on the Investment Portfolio accumulate tax free inside your Investment Portfolio. Buying and selling assets within your Investment Portfolio will attract no liability to capital gains tax. And the final proceeds received on redemption of the contract will be tax free in South Africa and the Isle of Man provided it is received by the original beneficial owner of the policy. It is however possible that withholding tax may be deducted from some of the dividends at their country of origin.
2. An investor can invest directly into a companies’ shares for example without having to invest in a fund – however we would caution that one should always diversify. Old Mutual has a wider selection through our wider stockbroker base
3. No rebates are paid to our stockbrokers – usually competitors will pay rebates to stockbrokers abroad but may not always show it in their pricing. We have the advantage of our Old Mutual PLC affiliations where no rebates are paid.
