Offshore accounts

expatasia

Loughton_Monkey wrote: »

The minute you 'hit' UK again, and become subject to UK tax, then I believe investment interest is payable just as if it were a UK bank. You can 'import' the money quite easily, legally, and tax free back into a UK bank account.

The 'bottom line' is that Offshore Accounts offer no [legal] tax advantage to UK citizens, even while living abroad. Their 'selling point' is usually 99% because when living abroad, it is usually impossible to open UK savings accounts. There is no advantage (I can think of) for a 'normal' UK citizen to use an offshore account.

When one hits UK again, how long does it take to become 'subject to UK tax again' ? Is it after 90 consecutive days have passed & one is no longer there as a pure 'tourist'? Forgive my ignorance, I'd like to know the answer to this. I assume timing is important, wouldn't be a good idea to retake up living in Britain in the middle of the tax year.


For how long has it been nigh on impossible to open UK mainland savings or current accounts, was it the case when you lived in China?

Can you envisage scenarios where these 'tax havens' cease to exist (except for the use of the local islanders) and the flight of dosh that would instantly ensue?

Thanks

shaun_from_Africa

When one hits UK again, how long does it take to become 'subject to UK tax again'

It really depends on why you are in the UK.
If you come to the UK on a regular basis for holidays or other non work related purposes, you wouldn't generally be classed as being resident until you exceed the time limit stipulated by HMRC (183 days in any one year or 91 days per year averaged over a 4 year period).

However, if you come to the UK with the intention to stay then you are classed as being resident from the day that you arrive, and you would be liable for UK tax from that date.

Loughton_Monkey

expatasia wrote: »

When one hits UK again, how long does it take to become 'subject to UK tax again' ? Is it after 90 consecutive days have passed & one is no longer there as a pure 'tourist'? Forgive my ignorance, I'd like to know the answer to this. I assume timing is important, wouldn't be a good idea to retake up living in Britain in the middle of the tax year.


For how long has it been nigh on impossible to open UK mainland savings or current accounts, was it the case when you lived in China?

Can you envisage scenarios where these 'tax havens' cease to exist (except for the use of the local islanders) and the flight of dosh that would instantly ensue?

Thanks

As mentioned above, you can return (I think up to 90 days) for 'holidays' in UK without upsetting your tax free status. But the minute you come home for good, you immediately become liable for tax. Obviously, this is done on a tax year basis. So return April 9th, say, means you are virtually 'normal'. Return, say Feb 15th can be around the 'optimum' - if, say, your UK earnings just about reach the annual tax allowance. And returning, say, April 4th would give you the 'right' for your full ISA and pension contribution allowance (letter subject to UK earnings or £3,600 minimum).

I don't know how long banks have operated 'residence' conditions. In my own case, I had several UK savings accounts anyway - but I had my own 'peculiar' circumstances in that I threw vast sums into my offset mortgage - and so was 'investing' it wisely - even though I didn't get the effective tax relief (that offset mortgages give). Also, at the time, HSBC Offshore interest rates were 'reasonable' but a lot went into investment funds anyway (where residence is not an issue either).

Personally, I don't consider these offshore accounts as 'Tax Havens'. We're not talking about complex domicile arrangements used by the mega-rich to avoid tax. Offshore accounts, almost by definition, fill the need of an "International Community", and can legitimately provide 'gross' interest on the basis that 99% of the time you are liable to tax in your residential country.

Knowing the EEC, I am sure they would 'like' Offshore banks (e.g. Guernsey, Jersey, Isle of Man...) to program their computers with 35 different country tax regimes, and apply the tax according to your residence. But that would be too complicated I expect.

expatasia

shaun_from_Africa wrote: »

It really depends on why you are in the UK.
If you come to the UK on a regular basis for holidays or other non work related purposes, you wouldn't generally be classed as being resident until you exceed the time limit stipulated by HMRC (183 days in any one year or 91 days per year averaged over a 4 year period).

However, if you come to the UK with the intention to stay then you are classed as being resident from the day that you arrive, and you would be liable for UK tax from that date.

Thanks. Intention to stay for six months, how would that play out? Or not sure how long staying (say an elderly relative needs caring for.....), or similar?

Jonbvn

expatasia wrote: »

Thanks. Intention to stay for six months, how would that play out? Or not sure how long staying (say an elderly relative needs caring for.....), or similar?

183 days per tax year will be the key. If you exceed it then you will become a tax resident.

Please check out this guide on the HMRC website.

rockitup

expatasia wrote: »

Thanks. Intention to stay for six months, how would that play out? Or not sure how long staying (say an elderly relative needs caring for.....), or similar?

With regards to a stay which would exceed the normal allowance, there is one box on the Non-Resident page of the tax form which allows for "excepted days" or words to that effect.

This can be used if for instance you sustain an injury or suffer serious illness whilst in the UK and cannot return to your place of residence. You would have to look at the "helpsheet for Non-Resident pages" on the HMRC website and this would probably explain other circumstances where the time you spent in UK could be allowable under this rule. It may also be worth speaking to a tax adviser who deals with Non-Resident individuals and take their advice.

I think it would be a good idea to keep documents to back up your reasons as to why your stay exceeded the time allowed

rockitup

http://www.hmrc.gov.uk/worksheets/sa109-notes.pdf

Check out Box 1 on page RRN 5 of the worksheet link above. That explains "exceptional days due to circumstances beyond your control"

expatasia

Apologies, this may have been discussed on here before but why do offshore banks (IOM/Jersey/Guernsey) only offer 50k (not 85k) protection to depositors in case of a bank's failure and given that the amount is limited (eg Jersey, maximum liability of the scheme capped at £100 million in any five year period, most of the scheme’s funding coming from the banks in Jersey) how safe are they? What are they doing to stop an exodus of funds since the turmoil/fiasco with the Icelandic bank(s)?

I assume the common thinking on these boards is that the operators of the FSCS scheme would pull out all the stops to compensate depositors in UK mainland in the event of another big crisis? Very different.

rockitup

I had a quite large deposit held with Alliance & Leicester Offshore (IOM) at the time of the Icelandic Banks failing and showing up the weaknesses in the depositor's compensation scheme.

Santander were also going through the motions of taking over A & L around that time, but when I tried to withdraw large chunks of my savings by CHAPS transfer, 2 transfers were delayed by up to a week.

I was told then by the bank that Santander were such a major bank and unlikely to fail, I replied what about the value of their assets then? The Spanish property market was in freefall at the time. I was met with a stony silence....

I would still hold money offshore with the likes of HSBC or Barclays but they are the only ones. In fact as a Non-Resident you can even open a Barclays Wealth International account with the funds held in London, and benefit from the £85,000 FSCS guarantee limit.

expatasia

rockitup wrote: »

I had a quite large deposit held with Alliance & Leicester Offshore (IOM) at the time of the Icelandic Banks failing and showing up the weaknesses in the depositor's compensation scheme.

Santander were also going through the motions of taking over A & L around that time, but when I tried to withdraw large chunks of my savings by CHAPS transfer, 2 transfers were delayed by up to a week.

I was told then by the bank that Santander were such a major bank and unlikely to fail, I replied what about the value of their assets then? The Spanish property market was in freefall at the time. I was met with a stony silence....

I would still hold money offshore with the likes of HSBC or Barclays but they are the only ones. In fact as a Non-Resident you can even open a Barclays Wealth International account with the funds held in London, and benefit from the £85,000 FSCS guarantee limit.

Surely Barclays would refer you to Guernsey if applying from overseas for products at London? That just happened to a colleague here.

As for 'stable' Santander (Bradford & Bingley) in IOM I'd not touch them either, besides they are arrogant in demanding (as well as the standard certified ID/address proof) ridiculous levels of evidence of source of wealth/funds ie. want translated wage slips/bank statements etc. No, gracias.


Anybody happen to know how many savers in banks in W Europe have actually got shafted and lost their deposits?

Cheers