With rising house prices and growing personal wealth, more and more UK investors are turning to offshore bonds as part of their inheritance tax planning, according to a new report from financial products research consultants Defaqto. The market grew by almost 50 per cent to £7.4 billion ($14.7 billion) in 2006, after a 60 per cent rise in 2005, despite uncertainty over estate planning and trust legislation. Continued outward migration, international portability and tax advantages are contributing to sales growth, while a further boost is expected to come from the authorities’ crackdown on tax evasion, which will encourage people to move offshore assets into more transparently legitimate investments, says the report. Defaqto also believes that this increase in demand will require an increase in the numbers of advisors who are willing to look to the offshore market to meet their clients’ needs and for providers to maintain the momentum by targeting lower premium but higher volume business. Fraser Donaldson, co-author of the report, said: “Offshore bonds continue to offer advantages in financial planning and are now becoming more mainstream in their appeal. While the demographic trends persist, it will be no surprise that demand for offshore bonds will remain strong. Their general flexibility and their ability to allow tax control are particularly useful in helping to mitigate tax for those planning to spend some or all of their time living outside the UK.” Offshore Bonds in the UK – A product for all seasons is available at £1,200 plus VAT for a PDF version and £595 (no VAT payable) for a single printed copy via Freephone 0808 1000 804 or www.defaqto.com