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Offshore accounts
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Hey Thanks RockitUp. Yeah I fill in self assessment every year. My dilemma is that in order to maintain the accounts in UK I can't declare to them that I'm now overseas, in Hong Kong. So I've kept a UK residential address and filled in R85. Then I can declare what I've been paid gross on my SE and sort out the tax with HMRC that way. I guess what I was asking is as onshore rates are generally better than offshore deposit rates, is it worthwhile doing it this way and paying the 20% basic rate of tax or just keeping the money in Jersey or IOM? The interest rate has to be significantly higher to cover the tax cost of keeping the money in UK. The compensation scheme is another factor. I have money in a fixed rate bond with AIB Bank (Allied Irish) IOM, who are protected by the Irish compensation scheme, which is unlimited at present. Anglo Irish (now part of AIB but retain seperate compensation cover) offer the next best rates and again claim to be covered firstly by IOM compensation, then the Irish should the IOM not be sufficient. These guys that struggle for liquidity in the interbank market are offering better deposit rates. If the Irish government are backing these deposits then they are bulletproof right?0
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Hey Thanks RockitUp. Yeah I fill in self assessment every year. My dilemma is that in order to maintain the accounts in UK I can't declare to them that I'm now overseas, in Hong Kong. So I've kept a UK residential address and filled in R85. Then I can declare what I've been paid gross on my SE and sort out the tax with HMRC that way. I guess what I was asking is as onshore rates are generally better than offshore deposit rates, is it worthwhile doing it this way and paying the 20% basic rate of tax or just keeping the money in Jersey or IOM? The interest rate has to be significantly higher to cover the tax cost of keeping the money in UK. The compensation scheme is another factor. I have money in a fixed rate bond with AIB Bank (Allied Irish) IOM, who are protected by the Irish compensation scheme, which is unlimited at present. Anglo Irish (now part of AIB but retain seperate compensation cover) offer the next best rates and again claim to be covered firstly by IOM compensation, then the Irish should the IOM not be sufficient. These guys that struggle for liquidity in the interbank market are offering better deposit rates. If the Irish government are backing these deposits then they are bulletproof right?
A lot of questions there ba22a, I am not a tax expert but have gained a bit of knowledge through being an Expat and looking at Tax websites and reading a book for Non-Residents.
As far as I can ascertain, the Revenue receive a list of peoples names and interest paid each year from the banks. When you fill in an R43 Form or your self assessment to claim back the tax deducted on your interest income then HMRC would either repay the amount of tax or may ask for proof like a "Certificate of Interest Paid". I ask for this every year from the bank and keep the originals in case they are needed later.
Personally I would stop using the R85 Form as it is for UK Residents only, let the banks tax you and then reclaim it by self assessment, then you are doing things the right way. Rules on Non-Residents change from time to time and also the Statutory Residency Test guidelines are being discussed starting this month so some things may change starting next April.
Regarding Offshore banks like on the IOM, remember that some depositors have still not received all their capital back and probably no more interest either. You are better off sticking with the UK banks as long as you have an address of a relative or friend who can receive statements and certificates of interest for you (Just watch out that this does not change in April 2012 though)
Regarding Irish Banks and the Irish Government guarantee, I have not kept up to date on that but was there an expiry date on the 100% guarantee? I have seen Irish banks interest rates for offshore accounts and just in my opinion I am not tempted to deposit there at present.
It's a tough world out there for Expat's financial decisions ain't it?0 -
Spot a trend here?
The annual report of the Guernsey Financial Services Commission, where many popular offshore banks are based, reports that last year there were 38 banks licensed on the island and they had £111 billion on deposit, a fall of 5.4 per cent on the previous year. However, in 2008 there was £157 billion on deposit with 48 banks. Go back to 1990 and there were 72 banks licensed in Guernsey – but just £15.5 billion on deposit.
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8596205/Expat-rates-the-best-monthly-interest-accounts.html0 -
Spot a trend here?
The annual report of the Guernsey Financial Services Commission, where many popular offshore banks are based, reports that last year there were 38 banks licensed on the island and they had £111 billion on deposit, a fall of 5.4 per cent on the previous year. However, in 2008 there was £157 billion on deposit with 48 banks. Go back to 1990 and there were 72 banks licensed in Guernsey – but just £15.5 billion on deposit.
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8596205/Expat-rates-the-best-monthly-interest-accounts.html
interesting article there, 10 banks gone in 3 years from Guernsey. Landsbanki (Icesave) was one, Northern Rock (Guernsey) shut up shop, wonder who else departed?
Probably Isle of Man figures on deposits have suffered in a similar way too in last 3 years.0 -
(Still on Guernsey)there's one encouraging piece of news for expat savers this week. Cooperative has increased its two year fixed rate to 3.75 per cent, up 0.25 of a point from last week and making it a better deal than Alliance & Leicester.
Interestingly, Cooperative also pays 3.75 per cent on two years onshore (although that's on a minimum of £2,000 rather than £5,000). It also pays the same 3.4 per cent fixed for a year onshore and offshore.
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8610710/Expat-rates-maximise-your-money.html
It's certainly rare for expats to be able to get as good a deal as savers on mainland UK.0 -
Regarding Offshore banks like on the IOM, remember that some depositors have still not received all their capital back and probably no more interest either. You are better off sticking with the UK banks as long as you have an address of a relative or friend who can receive statements and certificates of interest for you (Just watch out that this does not change in April 2012 though)
I live in the IOM and had deposits at KSF. I not only got all my money back, but got 5% interest on top! that is pretty good i htink. And at the time of failure dep guarantee was 15K/30K joint, but they raised it to 50K after the failure so more peple got more money back then they should possibly have expected. I made sure I had less than 30K in as I always make sure I keep under the guarantee limits.
IMHO, the UK caused the bank to fail by freezing their assets.0 -
I live in the IOM and had deposits at KSF. I not only got all my money back, but got 5% interest on top! that is pretty good i htink. And at the time of failure dep guarantee was 15K/30K joint, but they raised it to 50K after the failure so more peple got more money back then they should possibly have expected. I made sure I had less than 30K in as I always make sure I keep under the guarantee limits.
IMHO, the UK caused the bank to fail by freezing their assets.
Are they intending to raise it to 85K like in the UK? (100 Euros equivalent in Euro zone)0 -
I live in the IOM and had deposits at KSF. I not only got all my money back, but got 5% interest on top! that is pretty good i htink. And at the time of failure dep guarantee was 15K/30K joint, but they raised it to 50K after the failure so more peple got more money back then they should possibly have expected. I made sure I had less than 30K in as I always make sure I keep under the guarantee limits.
IMHO, the UK caused the bank to fail by freezing their assets.
Yes savers with under the compensation limit in IOM did get their money back as long as accounts were in their own name and not in an offshore bond with Skandia or others like that.
But quite a few misfortunate savers who were over the limit are only expecting something like 80+% by 2017 unlike savers in the UK branches of same banks, lucky I read over 6 months before the bank failures about the dangers brewing up in Iceland in the good ol' Telegraph newspaper. I had proceeds from my house sale in there and moved it to safer accounts.
Under new NR proposed guidelines it looks like Expats having bank accounts at a relative's/friend's address won't be losing brownie points.
with HMRC
They intend to look at if you have family (spouse, partner, kids under 18) still in UK, available accommodation, how many days spent in each of last 2 years in UK and other factors, see link below for proposals from Her Majesty's Treasury.
http://www.hm-treasury.gov.uk/consult_statutory_residence_test.htm0 -
Read this and thought things must be looking up for savers:
Barclays Wealth has changed its Sterling, US dollar and euro variable rate no-notice accounts to pay quarterly rather than monthly interest with no withdrawal restrictions. The rates are up to 1.6 per cent on sterling, 1.25 per cent on dollars and 1.75 per cent on euros. Rates include a 0.5 per cent bonus.
Well maybe not:
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8683712/Expat-rates-base-rate-causes-more-misery-for-savers.html0
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