Old Mutual Int’l launches expat-friendly bond in the Middle East, Africa

Old Mutual International (OMI) has launched a new expat-friendly investment bond for the Middle East and Africa.  

OMI has joined forces with discretionary fund manager Quilter Cheviot to create a product for UK expats in the region through a bond which will not trigger the 15% ‘deemed gain’ tax charge when the expat returns to the UK.

Quilter Cheviot will manage the investment portfolio linked to the bond, in a deal with OMI, with both companies being part of parent Old Mutual Wealth.

The DFM arrangement will allow UK expats to transact in the Middle East or Africa but also be able to take to the UK, without any need for the asset choice to be changed, to avoid incurring tax charges.

OMI said in a statement announcing the launch, that as the new product “removes any client influence over the investment choice or asset selection”, the bond is not regarded as a ‘highly personalised portfolio bond’. As a result the UK ‘deemed gain’ tax charge of 15% will not be applied upon the customer’s return to the UK.

This also means that the bond is able to invest in a broader range of assets than is usually permitted within a generic international portfolio bond in the UK, such as direct equities.

Brendan Dolan, sales director, Old Mutual International, said: “This is a great example of how Old Mutual International is working together with Quilter Cheviot.

“The new solution will be of interest to UK expats living and working in the Middle East and Africa who want to save for their future, and want a discretionary fund manager to be appointed to access to a wider investment choice, without fear of incurring a deemed gain tax charge by HMRC when they return to the UK.”

DFM demand

According to a recent OMI survey, there is growing demand in the region for professional investment experts – often referred to as Discretionary Fund Managers (DFMs) or Discretionary Asset Managers (DAMs) to manage a clients investments.  According to recent research, conducted by Old Mutual International in the region, over half of financial advisers in the Middle East plan to increase their use of DFMs in the next 12 months, this was a sentiment shared by advisers globally.

Demand for using an investment expert continues to grow due to financial advisers recognising they don’t have the time or specialist knowledge required to manage investments themselves. With the DFM focused on managing the investments, advisers are able to focus on the financial planning aspects with the customer.

Old Mutual Wealth oversees £122.2bn in customer investments (as at 31 March 2017).now has an adviser and customer offering spanning:

  • Financial advice delivered by the Intrinsic network in the UK and AAM Advisory in Singapore
  • Platform based wealth management and protection products delivered by Old Mutual Wealth in the UK and Old Mutual International globally
  • Asset management solutions delivered by Old Mutual Global Investors
  • Discretionary investment management delivered by Quilter Cheviot.
Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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