Looking for an offshore bank

cheekykid

Any ideas on wheere to find good offshore banks?

Suppose I open an offshore account and I decide to leave the interest in it without withdrawing it to my british account would that enable me to have tax free interest? Thanks

Cook_County

cheekykid wrote: »

Any ideas on wheere to find good offshore banks?

Suppose I open an offshore account and I decide to leave the interest in it without withdrawing it to my british account would that enable me to have tax free interest? Thanks

Don't you think we'd all be doing it if it was tax free?

Stavros_3

cheekykid

Cook_County wrote: »

Don't you think we'd all be doing it if it was tax free?

Then whats the advantage with offshore?

runciblespoon

There are a few things you can do with offshores:

You can choose to pay Retention Tax instead of Exchange of Information. If you're a higher rate taxpayer the first means you pay 20% tax now, instead of 40% tax on your tax return to HMRC. (Search 'EUSTD' for the details). Retention Tax will rise to 40% in 2011.

Some offshore accounts allow deferring interest payments. If you're a higher rate taxpayer who's about to retire, you can defer interest payments until after you retire when you might be on basic rate tax. So you'd pay basic not higher rate tax on them.

If you live abroad, in multiple countries or some other situation where you're not a British resident and so would find opening a UK account difficult.

Offshore banks typically have much better accounts for saving in foreign currencies than onshore ones (no particular reason other than that's what many of their customers want)

See here for offshore accounts tables:
http://www.moneyfacts.co.uk/offshore/default.aspx

Cook_County

Paying the retention tax is not an alternative to UK tax. UK tax is still payable in full - the retention tax is creditable in full on the UK tax return.

Offshore accounts can save tax for some expats as well as those who are not ordinarily resident or not domiciled in the UK.

However investor protection is typically not as good as onshore so increased interest rates are what you would want to cover this additional risk to you as the investor.

dunstonh

there are also offshore bonds which can be useful in certain scenarios. Gross roll up and deferment being two of the benefits. However, early chargeable gains if you withdraw above 5% can massively wipe any advantage plus more. So, its important to plan long term when you use those.