Offshore banks to disclose depoiters details to local tax-revenue

camforuman

I have heard that a new EU directive coming into force as from the 1 July 05 will ensure that all off-shore instutitions such as in the Isle of Man will give details of all depositors to the depositors relevant tax people. What is the latest on this if anyoen knows

Thanks

John

lswwong

HSBC in the Channel Islands has been sending out letters with forms attached to those customers who have registered an EU home address with them. Basically, one either confirms whether one's permanent address is outside of the EU i.e. non-domicile, or one opts for either a Retention Tax or Reporting Request option.

More info at https://www.offshore.hsbc.com/esd.

Fatboy_NSS

I believe that this means any bank in the EU has to disclose details of interest paid to the home country of the account holder. This only affects people who are trying to dodge the taxman by putting their money offshore and not declaring the interest. As long as you are declaring all the interest you receive on your tax return then it won't affect you.

dunstonh

Yes, this has been on the cards for sometime and July was agreed some time back.

Anyone who is using offshore accounts legally will have nothing to fear.

steveh2001

Is there any advantages to the offshore accounts now this new directive is in place?

dunstonh

Is there any advantages to the offshore accounts now this new directive is in place?

nothing has changed regarding the suitability of offshore accounts.

camforuman

I understand that offshore banks will levy a 15% tax on interest until 2008 which then rises to 20% until 2011 which then rises to a whopping 35% if you opt for the rention tax option by the off shgore institution . My question is this
Afer 2011 are all banks and institutions in UK going to levy this 35% tax on savings even for those savers that have deposits in UK

dunstonh

You will have the choice of having paying agents apply automatic exchange of information or adopt the witholding tax option which is what you mention above.

Those that choose disclosure will see no change. This is really to hit those that are illegally using offshore accounts for tax evasion. Although those that are higher rate taxpayers would still benefit by non disclosure (potentially).

This only applies to deposits and interest from certain bonds and investment funds. It does not apply to dividends from equities, life assurance or pensions funds.

Newer product variations are currently being put together by the providers where needed.

isasmurf

Only Belgium, Luxemburg and Austria will apply the withholding tax. All other countries will exchange information. This withholding tax is only for a transitional period for these three countries. Eventually they will have to exchange information like all other members.