They are typically offered by insurance companies and can be either onshore or offshore.

Onshore investment bonds are based in the UK and are subject to UK tax laws. They are taxed at a rate of 20% on gains, with the potential for additional tax liability depending on the investor's tax bracket.

Offshore investment bonds, on the other hand, are based outside of the UK and can offer additional tax benefits for UK investors. They are typically structured as a life insurance policy, with the investor as the policyholder and the insurance company as the beneficiary.