offshore accounts

andy_c_4 · 6 April 2005 at 9:56PM

I've been looking at a few of these offering 5.2% gross on £5k. Is there a catch? Do I get away without paying tax on the interest earned?

Thanks

dunstonh · 6 April 2005 at 10:29PM

Not if you are tax payer. You will pay it sooner or later. You just benefit initially from gross roll up.

Al_Mac · 6 April 2005 at 10:34PM

At some point you will either pay local taxes or home taxes. Big brother IS watching you, or a least trying to.

:beer:

blinko · 7 April 2005 at 2:44PM

is this correct ?? you (are supposed to) pay tax on the interest when you are credited with it at your offshore !!??

cheerfulcat · 7 April 2005 at 2:54PM

blinko wrote:

is this correct ?? you (are supposed to) pay tax on the interest when you are credited with it at your offshore !!??

Yes; that's why most of the offshore banks have roll-up accounts, where the interest is not credited to your account until the end of a specified term.

Cheerfulcat

dunstonh · 7 April 2005 at 4:17PM

Offshore investing can be useful for higher rate tax payers who do not expect to be higher rate tax payers in the future (at time of taking the money out). However, the higher charges associated with offshore products can often negate some of the benefits.

dunstonh · 8 April 2005 at 10:21AM

Perhaps my use of "initially" was misleading. I did type a longer paragraph where initially was referring to the first benefit. I then altered the post removing the bulk of it but left initially in there.

Lets assume offshore investment bond...

The tax on the investment growth can be deferred until the investor chooses to take the proceeds. e.g. when in a lower tax bracket at retirement.

The investment funds themselves are tax free, with the exception of irrecoverable withholding tax, which is deducted from the dividends and interest received by the fund. (unlike onshore bonds where the funds are subject to tax).

blinko · 8 April 2005 at 10:21AM

isnt off shore interest paid annually ? by most off shores eg northern rock guernsey, nationwire ireland etc ??!! or can you choose when yo uwish to receive interest, also how secure is your money from unfriendly governments, people, agencies etc ??

also i heard that there are new transparency laws supposed to be coming in where off shores are more co-operative with governments ??!! has anyone else heard that

isasmurf · 8 April 2005 at 7:47PM

blinko wrote:

also i heard that there are new transparency laws supposed to be coming in where off shores are more co-operative with governments ??!! has anyone else heard that

Are you referring to the EU Savings Directive? EU countries (and Switzerland) must now share savings information with each other to prevent tax evasion. A few countries, Austria and Switzerland spring to mind, will not share the information, but will instead charge a withholding tax. Can't remember the details.

andy_c_4 · 8 April 2005 at 10:18PM

Thanks everyone. Guess I'm still gonna have to keep looking for that golden opportunity. As a higher rate tax payer with fully utilised cash ISA allowance is there anything else that you know of? I've little confidence in the stocks and shares options!

Oglaigh_na_h-Eireann · 8 April 2005 at 10:34PM

andy_c wrote:

Thanks everyone. Guess I'm still gonna have to keep looking for that golden opportunity. As a higher rate tax payer with fully utilised cash ISA allowance is there anything else that you know of? I've little confidence in the stocks and shares options!

Premium Bonds, prize fund pays 3.2% tax free. :T

offshore accounts

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free