Offshore Salary

MadSage

I'm a freelancer and I'm about to sign a contract with a company in the US. Payment is around 2000USD per month. Instead of them paying into my account in the UK, I was wondering if I could setup an offshore USD account for them to pay into. The reason being, if what I understand is correct, I won't have to declare this as taxable income as long as it's not in the country and can leave it in the account for a few years earning interest upon interest.

The question is... where can I find a good account for this purpose? Looking around, I get the impression that money can only be transfered from accounts in the UK. I don't have much as an initial investment at the moment because most of my money is tied up in an A&L DirectSaver (5.80% AER). Obviously I have to take the interest rate into account too, otherwise I may be better off bring the money into the UK, paying tax straight away and putting it in my DirectSaver.

Hope that make sense

Jonbvn

The important thing to consider is whether you will be resident in the UK for tax-purposes. Basically, if you are in the UK for less than 90 days per year, you will be non-resident, which means you will not be liable for UK tax on income from outside the UK. (NB. The whole issue of tax residence is quite complex).

If you do not statisfy the 90 day rule, then you are liable for the tax on the $2k/month regardless of where the money is actually deposited.

Finally, most offshore banks in Jersey etc. have quite high minimum opening balance requirements. Addtionally, offshore banks within Europe now have to comply with the European Savings Diretive (ESD), which basically means all interest is taxed at 15%, which will increase to 35% shortly.

Based on the above, I believe it would be best if you brought your money directly into the UK.

The above is my opinion only, and does not constitute advice.

MadSage

Thanks for your advice... er... opinion

Now you mention it, I do recall reading about the 90 day rule, so it does seem a whole lot simpler just to keep all my money here.