Couple have £1.2million in Iceland (IofM branch/not protected)

gozomark

tonytsdiver wrote: »

If they are with an Isle of Man branch, I think they will still have a leg to stand on.

If its IOM they should have three legs to stand on

musehead

I suspect they went offshore because the interest rate was better.

islandannie

Regardless of the reasons or wisdom for their decision to go offshore,anyone who feels it serves them right or has no sympathy for the devastating position they find themselves in,is really quite an unpleasant individual.

Bromley86

musehead wrote: »

I suspect they went offshore because the interest rate was better.

It's hard to check as the old website has gone, but from Google cache pages it looks like the interest rate was marginally lower than that at KE.

Reaper

I'm puzzled by this story. When I skimmed the article I somehow missed the bit where they said this:

I don't avoid tax. The product I'm in does not avoid tax.

In that case why did the Financial Advisor tell them to put their savings in an offshore account if they have had to pay tax on the interest anyway? I think he's got some explaining to do.

I wish the BBC would thoroughly research the articles instead of giving us half the facts and leaving us to guess the rest.

Gwhiz

islandannie wrote: »

Regardless of the reasons or wisdom for their decision to go offshore,anyone who feels it serves them right or has no sympathy for the devastating position they find themselves in,is really quite an unpleasant individual.

I think the term you are looking for is cocktard!

sunshine-days

They invested in a bond from Royal Skandia.

BBC:
The Johnstons invested their part of the proceeds in an offshore bond offered by Royal Skandia.
However, the money was placed in an Isle of Man subsidiary of the failed Icelandic Bank Kaupthing Singer and Friedlander (KSF), which went bust this month.

****

Apparently, there are many others in the same situation.

From Telegraph Oct 17th:

Investors who had their cash in offshore bonds could also lose their nest eggs. British investors have as much as £5bn in the schemes, which are used by people who intend to move or retire abroad and mostly have very high minimum investment limits.

Most of the bonds sold by big companies such as Aegon Scottish Equitable, offered an offshore cash account with the Icelandic banks as part of their bonds’ portfolios.

These are corporate accounts with a collective investment structure and are not automatically eligible for the kind of compensation available to ordinary investors, even if any existed.

So far, 300 Aegon bondholders have been hit with investments amounting £57m, 300 at Axa with holdings of £50m, 120 at Norwich Union with £15m of deposits. The Prudential, Skandia and Clerical Medical who also have exposures said they were investigating the extent of the problem.

http://www.telegraph.co.uk/finance/personalfinance/savings/3216489/Financial-crisis-Britains-offshore-investors-stand-to-lose-hundreds-of-millions-of-pounds-on-the-Icelandic-banks-meltdown..html

IT_nerd

nilrem wrote: »

For Gods sake have a heart! :mad:

One day you may make a mistake and hopefully people won't adopt your attitude to your misfortune!

TBH you sound like someone who hates anyone who is successful and has more cash than yourself!

Meh, I put money in icesave.. I made the mistake.. But I knew exactly what I was getting into, and there's no way in hell I would have put over 35K in.
Anyone who puts 1.2m in one account is insane.
I can't believe an IFA told them to do that!

bartsimpson

Reaper wrote: »

I'm puzzled by this story. When I skimmed the article I somehow missed the bit where they said this:

"I don't avoid tax"

In that case why did the Financial Advisor tell them to put their savings in an offshore account if they have had to pay tax on the interest anyway? I think he's got some explaining to do.

I think that the advice would be not to avoid tax but to get the best possible rate of interest for your money. On £1.2 million even a half percentage point difference in interest is a lot of money.

And to be honest, if I had 1.2 mill, I would be doing my upmost to avoid paying the tax (legally) because the government would want to rape you to the tune of £480,000 (40% of it). Then use the money to build asylum facilities, pay ITV for the endless quit smoking ads, buy fireworks for the Olympics etc etc.

jdavtz

The KSF IoM rate was 6.86% AER, higher than the on-shore 6.55% AER rate with KE.

Accounts offshore are just as liable for tax on interest as accounts onshore, if you're bringing the money back into the UK.