The STM Life Capital Bond Germany has been designed to meet all German life assurance legislation and so offers tax benefits for income tax and estate planning, the firm said in a statement, adding that clients receive a tax-free roll-up of all gains, dividends and interest, tax free switching of fund and/or investment strategies, and no additional VAT on asset management fees.

Nigel Smith, deVere Group’s global technical support manager, also highlighted the policy's flexibility as being another draw in addition to its tax mitigation possibilities. Clients can chose to denominate it in a range of currencies and proceeds can be paid in cash or securities (depending on the chosen investment); the policy can also be adjusted to other jurisdictions to maintain tax benefits.

The deVere Group, which says it is the first IFA to bring such a product to Germany’s expat community, launched the STM Life Capital Bond Germany in Munich, Hamburg and Frankfurt – cities all considered expatriate hubs within the European economic powerhouse. Close to 100,000 Britons alone are estimated to live in Germany. (Source: The Guardian)

While not always as widely understood as other types of wealth management players, life insurance firms, and the structures they can put in place for high net worth clients, are an important part of the industry. The types of products that can be sold and marketed to clients vary, as do the tax treatment of such products. (The term “wrapper” is sometimes used, although its meaning varies between, say, the US and Switzerland.)