The bond, called the Wealth Portfolio, requires a client to cede all control over investment choices and asset selection to Old Mutual’s sister company, Quilter Cheviot, ensuring it is not regarded as a personalised portfolio bond.
The insurer said the bond is designed to deliver tax efficient investment outcomes for UK expats in the Middle East and Africa through a product which is “fully portable” when the expat returns to the UK.
Under the terms of the tie-up, Quilter Cheviot will refund the administration charge applied by OMI on the bond.
“This innovative solution removes any client influence over the investment choice or asset selection”, the company said in a statement on Tuesday.
“The bond is not regarded as a ‘highly personalised portfolio bond’ and therefore the UK ‘deemed gain’ tax charge of 15% will not be applied upon the customer’s return to the UK”, it explained.
OMI said the product “will provide UK expats with peace of mind that the investment can be taken back to the UK without any need for the asset choice to be changed to avoid incurring a deemed gain tax charge”.
The bond’s charging structure will mirror that of the company’s other portfolio bonds in the region, meaning the standard annual management will apply.
A typical changing structure consists of a premium size of $375,000, to which corresponds an annual management charge of 0.75% per year for the first 10 years, which is then reduced to a yearly fee of 0.2% for the term of the policy.
The news follows OMI’s launch of the Select Bond, a product aimed at UK savers hit by pension allowances cuts.
