Does that line ever gets used outside the UK,or is it just one of those things that is purely British?
It has reached the point of being a joke in our house.
If you haven't met it yet, this is how it works.
The person starts off by saying
meaning that they do not expect you to be insulted by what they are about to say.
They then proceed to say something REALLY offensive, such as
"you are looking really fat these days"
"your house is really crappy compared with mine"
"your kids are damn ugly"
but because they have started off by saying "No offense", that is all OK. You are not supposed to be rude back/slam their face into a wall/burn down their superior house/point out that their kids are actually evil little shits, regardless of how angelic they might look.
So, watch out for it if it has not already arrived in your neighbourhoood! Hey, maybe you can be the first one to use it! Maybe not a good idea if you live in a place that allows fire arms?