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Opening bank account overseas for a uk poker player

steveholt
Posts: 4 Newbie
No income tax is applied to poker winnings atm in the uk. However I believe I must pay tax on the interest earned if I keep money in a UK savings account.
I was wondering what a reputable bank that is outside the UK would be a good place to keep my bankroll, as I would rather have the revenue continue to look at me as someone who earns zero taxable income as it means I don't have to bother with self assessment.
As far as I have been able to ascertain, keeping money won from gambling in an offshore account legal.
1) Is doing this legal
2) I have a small amount that I would like kept in a reputable bank where I would not be required to pay tax on the interest. I am not interested in investment of any kind, liquidity is also very important.
The nuts would be if i could find such a bank that. had internet based accounts that gave me as much liquidity as i have when banking online in the UK. I know this is pretty unlikely.
Can anyone recommend such a bank account, or have any first hand experience that may help me?
Thanks for your time
I was wondering what a reputable bank that is outside the UK would be a good place to keep my bankroll, as I would rather have the revenue continue to look at me as someone who earns zero taxable income as it means I don't have to bother with self assessment.
As far as I have been able to ascertain, keeping money won from gambling in an offshore account legal.
1) Is doing this legal
2) I have a small amount that I would like kept in a reputable bank where I would not be required to pay tax on the interest. I am not interested in investment of any kind, liquidity is also very important.
The nuts would be if i could find such a bank that. had internet based accounts that gave me as much liquidity as i have when banking online in the UK. I know this is pretty unlikely.
Can anyone recommend such a bank account, or have any first hand experience that may help me?
Thanks for your time

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Comments
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I believe this is called tax evasion. If you are UK resident and domiciled (i.e. if you live here and are subject to UK taxes) then hiding your earnings overseas to look like you have no income is illegal. Most banks will therefore probably want nothing to do with it.
If you're UK resident and domiciled, the only way to get tax free savings is through NS&I index-linked savings certificates or through cash ISAs, and both of these have limited maximum investments.
I think you're going to have to suck it up and pay taxes like the rest of us!I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
As far as I have been able to ascertain, keeping money won from gambling in an offshore account legal.
1) Is doing this legal
2) I have a small amount that I would like kept in a reputable bank where I would not be required to pay tax on the interest. I am not interested in investment of any kind, liquidity is also very important.
Thanks for your time
It is perfectly legal to keep funds off shore, but as pointed out you have to declare any intrest payments on your tax return.
To encourage you to do this, most offshore banks, in so called 'tax havens' (channel islands, isle of man ect) accesible from the UK, participate in the EU retention tax, (15%) or information share schemes. So that EU citizens opening accounts have to opt to, either pay the retention tax, on their intrest, or agree to have information about their accounts shared with the relevant tax authorities.
If you open an account in a normal overseas bank you will find yourself paying tax on the intrest at that countries prevailing rates, and in all likelyhood that information would be shared with the revenue.
Either way if you declare the amount of tax on the intrest you have paid in most cases you won't have to pay it twice.
Contrary to popular belief the vast majority of swiss accounts operate in a similar fashion, also they are rather hard to open.
If you domicile yourself outside the EU, then all the 'tax haven' accounts become tax free on intrest, but you would have to pay tax in the country, that you were domiclied in.
There is a saying that holds very true.
The only two certainties in life, are death and taxes.0 -
Ian is out of date - the EU savings Tax Directive withholding rate is now higher than 15%. It is applies in only very very jurisdictions - not "most". Switzerland has no such withholding regime.
There is zero UK tax for non-UK domiciliaries plus zero foreign tax (except for US citizens) providing a £30,000 payment is made to HMRC.
Aegis is correct. The OP is planning on a criminal act.0 -
Could you be more specific about what is illegal?
I know that my poker winnings are themselves not taxable, so I assume earning interest in an offshore account and not declaring the amount in order to pay tax on it is what the problem is?
The real reason I want somewhere safe to put my money is the poker community is increasingly suffering from attacks from individuals and organization who gain access to poker accounts and empty the account.
The thing is I obviously want to keep well within the law, but I don't even care if I don't earn any interest, as the 'investment' is done on a daily basis when I play.
To clarify my position with the inland revenue, I have been in contact with them about if poker winnings are taxable and I was told in no uncertain terms that it was not. I keep meticulous records of all my play + deposits and withdrawals as they advised me to, and I would be able to prove that all of the money I have in my name in whatever form was earned exclusively playing poker if i were ever audited.
I'd really appreciate some detailed answers from someone who knows this kind of thing inside out, or if one of the previous posters would expand and clarify their view on this
thanks all0 -
Could you be more specific about what is illegal?
I know that my poker winnings are themselves not taxable, so I assume earning interest in an offshore account and not declaring the amount in order to pay tax on it is what the problem is?
Spot on. The winnings themselves are exempt from tax, as are all gambling winnings in the UK. However, income from interest is classed as regular income, even if the capital value comes from gambling.The real reason I want somewhere safe to put my money is the poker community is increasingly suffering from attacks from individuals and organization who gain access to poker accounts and empty the account.
Surely any bank would do if it gives you a user name that you don't need to share with anyone and a password that you never enter completely will do? That's pretty much any UK bank with online banking.The thing is I obviously want to keep well within the law, but I don't even care if I don't earn any interest, as the 'investment' is done on a daily basis when I play.
An offshore account is an option, but it's not inherently any safer than an onshore bank account because it's still going to be operated in much the same way, using a username and password to access your online portfolio (assuming you want online access of course). However, the tax situation is much more complicated because your interest must be declared to the revenue even if you don't earn enough of it to push you into the higher rate band.
Onshore, the basic rate would be deducted at source, which would almost certainly simplify matters immensely if you don't earn more than £40k in interest each year.
I'm not a tax adviser or anything, so consult someone who specialises in that field if you want to stay on the right side of the law while optimising your account set up.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
what if i set up a bank account in the UK and asked not to be payed any interest?0
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You could certainly do that if you wanted, though I can't think why you'd prefer to deliberately lower your own income like that...
Another option that might appeal is using the roll-up facility that can be offered by an offshore account. This doesn't make the lump-sum tax-free, but it does allow you to pay all the tax on the interest at the end of the deposit term rather than throughout. In other words, you get paid gross while the deposit is left alone, and when you decide you want the money you make a single self-assessment and pay the taxman what he's owed in a single sitting. Most offshore accounts will therefore give you a capital account (where you put your money) and an interest account (which is where your interest is paid to). At the end, you owe, say, 20% of the total value of the interest account in tax, and you're square.
I think that's how it works anyway!I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
steveholt, would your interest at say 5% be more than about 5500 a year? Which implies 110k deposited on average. If it's less than that it'd be less than the personal allowance and you could register for gross interest. This applies to the total interest of all of the accounts, not just each individual account.
Assuming that the interest is more than that, take the interest and pay an accountant a few hundred Pounds to sort out the tax for you. It's not worth avoiding the interest when it'll pay the accounting bill for you and still leave you ahead.0 -
thanks for the bump jamesd.
Right now it seems a good time to have some money to put in savings with the high rates of interest being offered.
Unfortunately I don't understand any of your first paragraph beyond the first sentence. I have a lump sum of 70k USD I am prepared to invest for a year with no access to the funds.
1) What would be the best way to go about this, as i assume UK banks want sterling and i know nothing about forex trading.
2) Would it still be more equitable for me to take the highest rate of interest available and pay an accountant to do my tax for me?
3) If yes, could the responsibilities of an accountant include managing the lump sum in the following manner: Invest the money initially into a savings account with easy access and an inflation-beating interest rate, and then drip feed money into multiple savings accounts to take advantage of the high rates of interest available? ie there are a number of banks and building societies offering rates of 8-10% but they tend to have a monthly cap of 500 quid. I know he probaly won't be able to manage accounts in my name, I'm thinking more of give me a list of transfers I need to do for 12 months so I can give him a once yearly payment for that plus doing my tax. No idea if that makes any sense, please call me up on anything i don't explain well or misunderstand.
Sorry for the long questions but I have found the advice given on this board so excellent, I would like to be fully prepared before discussing this with an accountant. And I'm well tight and this is free!0 -
If the account is in the uk, tax will automatically be taken from the interest, so there is no need to do any paperwork unless your total yearly income is less than the personal allowance or more than the 20p tax band. Banks that have regular saving accounts sometimes require your main account to be with them, eg Alliance and Leicesters 12% monthly saver. So dripfeeding into multiple accounts could see them closed.0
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