answered 1 year ago
Pity SquareInsider does not let us have his real name so that we can check him out on the FSA register at www.fsa.gov.uk/register/home.do
Not only does he not answer the question, but SquareInsider is also wrong to say that "OTB's are life ins bonds, so income and gains are tax free" in fact they are tax deferred and tax will be payable at your highest marginal income tax rates on maturity.
Also, you can only take 5% of the original amount invested, as income, each year, any amount over this will be immediately taxable.
Likewise, after 20 years the 5% tax deferred allowance will have to cease, as any further payments would then be taxable.
Furthermore, the bond would have to be written in trust to be potentially outside your estate for IHT purposes and this could trigger entry, periodic, and exit charges instead of IHT. Also you would potentially need to survive 7 years for this not to be a Potentially Exempt Transfer (PET)
If it sounds too good to be true, it probably is. Offshore bonds tend to be expensive, so be very careful of anyone recommending them unless you have maximised your ISA allowance every year and intend to continue to do so in the future and you are using your Capital Gains Tax allowance in full every year.