The Duchy of Lancaster, which manages the investments for the Queen’s private estate, invested around £10m in offshore accounts. While the Queen almost certainly didn’t know where her money was being invested, it reinforces the idea that the wealthy can squirrel away their money and protect it from the tax man. But if they can do it, can you?

Does it really help avoid tax?

This is a big question. If someone is resident in the UK the tax advantages of holding offshore funds are limited. Often, the advantage is simply that the funds don’t pay tax at source, which means that the investments get longer to roll up before tax is due.

For example, a UK fund might pay tax at source at 20%. Paying that tax at source, rather than later on, means that the pot keeps growing for another six months without deduction of tax. For most people, the advantage is marginal, but it can make a difference if you are the Queen with several million pounds to invest.

But offshore investment is shady, right?

Not always. Sometimes offshore investments are used to hide money from the authorities, but there is no suggestion of that here. Equally, offshore funds should not be confused with some of the offshore trust structures, used for aggressive tax avoidance. These have come under significant scrutiny from HMRC. In the 2015/16 tax year HM Revenue & Customs (HMRC) gathered £29bn from tax evasion investigations, giving a 7% boost to its revenues. Around £2bn was attributable to “cracking down on people who think they can hide money offshore”.

Could I already hold offshore investments?

Possibly. Investors should remember that Dublin or Luxembourg are deemed to be offshore locations as well as more exotic locations. Many of the larger asset management groups have fund ranges based in these jurisdictions, particularly among ETF providers.

So why hold offshore investment funds?

Apart from the small tax advantages, in most cases it will be because a ‘lighter touch’ regulatory regime means that the funds can invest in areas that may not be open to them in a UK-registered structure. For example, a lot of hedge funds are domiciled in the Cayman Islands. This also means that investors have fewer protections, including no protection from the Financial Services Compensation Scheme.

While the whole thing smells a little fishy, the Queen probably isn’t reaping huge tax advantages from the scheme. Of course, technically the Queen is not legally obliged to pay tax, but instead ‘choses’ to pay income and capital gains tax, so really, it’s up to her anyway.