← Calculators/Tax year 2026/27·Last reviewed
Offshore bond tax calculator
The tax on one offshore investment bond's chargeable-event gain — the fund rolled up gross, so the whole gain is added to income as savings income and taxed at your marginal rate after top-slicing relief, with no basic-rate credit.
Free, no sign-up. Runs the same engine and the same versioned tax-year config the signed-in suite uses — nothing leaves your browser. How we verify the numbers.
Gain, years, income.
From the certificate, or the chargeable-event-gain calculator.
Complete policy years to the event — used to slice the gain.
Salary, pension, self-employment, rental — gross, before the personal allowance. Excludes the bond gain.
Don't have the gain yet? Work it out on the chargeable event gain calculator and bring the figure here. Uses the 2026/27 versioned tax-year config.
— In short
An offshore bond rolls up gross, so the whole chargeable-event gain is added to your income as savings income and top-slicing relief moderates the effect of a multi-year gain landing in one tax year — but there is no basic-rate credit, so the gain is taxed at your marginal rate. This tool gives the tax on this one gain — not the relief figure alone (see the top-slicing relief calculator), nor which wrapper to choose in future (see the wrapper tax comparison).
— How it's calculated
Gross roll-up, then taxed in full on a chargeable event
An offshore bond's fund suffers little or no tax internally, so the gain rolls up gross year to year. On full surrender, death, maturity or an excess event the whole chargeable-event gain is charged to income tax as savings income of that year — there is no credit for tax paid inside the fund, because effectively none was. The gain sits above other income but below dividends in the band stack, and counts towards adjusted net income for the personal-allowance taper.
IPTM3210 (offshore / foreign policies) · ITTOIA 2005 s.465–465B
Top-slicing relief — from year one, no credit behind it
A gain that built up over several years is charged in a single year, which can push it through the higher or additional-rate threshold. Top-slicing relief compares the tax on the whole gain with the tax on the annual-equivalent “slice” (the gain divided by the complete policy years) scaled back up. The personal savings allowance and starting-rate band are recalculated at the notional slice income for gains from 6 April 2021 (the post-2021/22 IPTM3820 recalculation). Because there is no basic-rate credit, the relieved figure is the tax actually due on the gain.
ITTOIA 2005 s.535–537 · IPTM3820 · HMRC Agent Update 83 (2021)
Why the tax is higher than an onshore bond
The gain is computed the same way for both bond types, and both get top-slicing relief. The difference is the credit an onshore bond carries and an offshore bond does not: the onshore 20% basic-rate credit reflects tax paid inside the fund (ITTOIA 2005 s.530), and s.531 does not extend it to offshore policies. For the same gain and the same taxpayer, the offshore tax is therefore higher by the credit amount — the trade-off for gross roll-up while the bond is held.
ITTOIA 2005 s.531 · IPTM3810 / IPTM3210
— Worked example
- Chargeable event gain
- £80,000.00
- Annual equivalent / slice (gain ÷ 8)
- £10,000.00
- Top-slicing relief
- £2,343.00
- Basic-rate credit (offshore — none)
- £0.00
- Tax on this gain, after relief
- £30,400.00
Computed live by the same engine the tool above runs. The identical case on an onshore bond shares the gain, slice and top-slicing relief — but a deemed 20% basic-rate credit reduces the tax on the gain. Compare it on the onshore bond tax calculator.
— Frequently asked questions
How is tax on an offshore bond gain calculated?
The whole chargeable event gain is added to your income as savings income for the year of the event, because an offshore bond rolls up gross. Top-slicing relief is applied to moderate a multi-year gain landing in one year, and the relieved figure is the tax due — there is no basic-rate credit to deduct, so the gain is taxed at your marginal rate.
Why is offshore bond tax higher than onshore?
The gain and top-slicing relief are computed the same way for both, but an onshore bond carries a deemed 20% basic-rate credit for tax paid inside the fund, while an offshore bond rolls up gross and carries no credit (ITTOIA 2005 s.531). For the same gain and taxpayer, the offshore tax is higher by the credit amount — the trade-off for tax-free roll-up while the bond is held.
Does top-slicing relief apply to offshore bonds?
Yes. Top-slicing relief applies to both onshore and offshore bonds (ITTOIA 2005 s.535–537), and for gains from 6 April 2021 the personal savings allowance and starting-rate band are recalculated at the notional slice income (the post-2021/22 IPTM3820 recalculation). Because an offshore bond has no basic-rate credit behind it, the relieved figure is the tax actually payable on the gain.
Is an offshore bond gain taxed as income or capital gains?
As income. A chargeable event gain on an offshore bond is charged to income tax as savings income under the chargeable-event regime (ITTOIA 2005 s.461–465), not to capital gains tax. It uses the personal savings allowance and starting rate for savings, and counts towards adjusted net income for the personal-allowance taper.
What is time apportionment relief on an offshore bond?
Where the policyholder was resident outside the UK for part of the policy term, the gain on an offshore (foreign) policy can be reduced in proportion to the days of non-UK residence (ITTOIA 2005 s.528). This tool computes the UK tax on the full gain for a UK resident throughout; where non-residence periods apply, run the full bond workbench and take advice on the apportionment.
— When you're ready
More than one gain in the same tax year, or a certificate to reconcile? The bond workbench handles multiple gains, the final-year rule and certificate reconciliation.
With a free account, the same engine runs inside the workbench:
- save the calc to a client file, with the full replayable audit trail
- export the branded compliance annex PDF — full working, legislative references, config version
- multi-gain, multi-scheme and prior-year history the single-screen tools don't take
- upload statements and certificates — the figures are extracted for your review
Free plan: 3 calcs / month · no card required · no time limit. Unlimited on Pro and Firm.
— Related
- Onshore bond tax calculator — the same gain with the 20% basic-rate credit
- Top-slicing relief calculator — the five-step relief working in full
- Chargeable event gain calculator — work out the gain first
- Pension vs ISA vs bond tax comparison — for a future wrapper choice
- Full bond TSR workbench — multiple gains, final-year rule, certificate reconciliation (free account)
For planning and illustration purposes only · Verify all inputs against source documents · This tool does not constitute financial or tax advice.