A case of small is beautiful

Changes to this year's Finance Act may improve the choice of corporate investment vehicle for smaller companies

For many years offshore investment bonds have been a popular investment vehicle for corporate funds, mainly due to their tax deferral properties and administrative simplicity. The extension of accounting periods for investment-based life insurance contracts appeared, at first glance, to remove both the ability to defer tax and the simplicity inherent in the product. However, a closer examination of the application of the loan relationship rules reveals that, for many small companies, the practical impact of this change is negligible. Indeed, following the changes in the Finance Act 2008...