Is permitted in off-shore location (5)

I believe the answer is:

islet

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'off-shore location' is the definition.
I can't judge whether this defines the answer.

'is permitted' is the wordplay.
'permitted' becomes 'let' (to let something happen is to permit it).
'is'+'let'='ISLET'

'in' is the link.

Can you help me to learn more?

(Other definitions for islet that I've seen before include "Tiles (anag.)" , "One of Langerhans's" , "Ait or key" , "Stile (anag)" , "Eyot, key" .)

I've seen this clue in The Irish Times.

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