Eu Savings Directive

ewanirvine

My mother has some monies in the Northern Rock in Guernsey and Alliance and Leiocester in Isle of Man. Roughly about £17,000 adn it has been there for a good few years.

She has received letters from both about a new European Union savings Tax Directive. They ask for details of tax / National Insurance type details.

She will give them the details but Does this means the Inland Revenue can now look back at monies that have been invested abroad and now recalim tax to the start date? Is there any way round it.

skylight

I know is the Abbey - but the information should be them same!
http://www.abbeyinternational.com/eu_tax.asp


hope it helps.

isasmurf

Nothing has changed for law abiding people. HM Revenue and Customs will only be asking for the tax that your mother should have been declaring anyway, and there is no way around it as that would be breaking the law.

Issues for UK Investors (HMRC)
Frequently asked questions (HMRC)

grumbler

Recent thread:
Offshore banks to disclose depositers details to local tax-revenue

dunstonh

Couple of recent threads on this subject.

Most important thing is that nothing is changing for those that have offshore accounts and are acting within the law. Those that have been using them for tax evasion (illegal) rather than tax efficiency (which is very legal and what you should be doing) will now be caught.

I am about to invest another £300k for a couple of clients offshore because the tax efficiency is still there. Its not a problem.

Cook_County

The EUSTD is hardly new since it has been kicking around for a long time.

If your mother is domiciled and ordinarily resident within the UK then she is taxable on worldwide income & gains as they arise.

If she has failed to declare the interest in the past then she should come clean now before HMRC find her (Guernsey & IoM have full exchange of information agreements with the UK in any case).

If she does not want withholding on interest accrued after 1 July 2005, she should advise these banks of her UK tax office details.

isasmurf

Just read this article in The Times last week.

This paragraph interested me
Taxpayers who fail to mention offshore interests on their tax return face heavy penalties if they are caught. The Revenue will demand payment of all tax owed on offshore accounts over the past 20 years, plus interest. In addition, it will also impose a fine of up to 100 per cent of this sum.

I hope you've all being declaring your offshore interests! :eek:

rbakker

I'm a resident in the UK but not "domiciled", i.e. I intend to return to my country of birth (outside the EU, as it happens). Till now (as I understood it) this meant I didn't have to pay UK tax on my overseas earnings, which included interest from savings held on the Channel Islands.
Does anybody know if this new EU directive changes anything for me and my ilk?

Fatboy_NSS

As long as you legitimately don't have to pay tax in this country then nothing has changed. This is simply a move to stop people being able to hide funds offshore which they do have to pay tax on.

Cook_County

As you are domiciled outside of the UK you are taxable in the UK only on income and gains that arise in the UK and Republic of Ireland or are remitted to the UK.

If your non-UK income is not remitted to the UK you pay no UK tax on it. The bank in the Channel Islands will either ask you to self-certify that you are non-UK domiciled or request an accountants letter confirming this. either way the income is not taxable.

If any of the money in the income account (which I take it is segregated from the capital account) is to be remitted to the UK it may be possible to do this by what is known as 'carouselling' the account. This is a specialist planning idea.

If the amiount is substantial and you want an effective shield from UK inheritance tax you'll want an excluded property trust...

nsc_2

We've been living & working (quite happily for meagre salaries) in France since 2001. At the moment, we don't pay tax as we don't earn enough. We also receive around £4k a year to enable my wife to stay at home for 3 years to look after our 2 babies - we don't want to lose this. (Incidentally, I'm a UK National, my wife is French).

However, November 2004, we sold our house in England and placed the money in an Isle of Man account (just under £100,000). We should get a gross return of around £5000 pa. However, this money is our one-off security. We have no other assets, drive a crappy car, clothe our babes in hand-me-downs, etc. (I'm not whingeing - we're happy - but it's knowing that that money's there that enables us to feel secure).

Now we're not looking to tax evasion, just the best way to proceed.

So, EUSTD. What to do? Do I have the choice of paying tax in the UK or in France? If our interest was taxed by the English authorities, would we still have to declare it in France? Wouldn't that mean that we would risk being taxed twice for the same money?

We still have our old onshore accounts - and our banks are well aware that we live in France. Thus I could transfer the money back onshore and pay tax at source.

Alternately, if we still need to declare it to the French authorities and possibly run the risk of losing my wife's stay-at-home-to-look-after-babies money, my parents are pensioners. I could 'give' the money to them - but how would that then affect their pensions?

Sorry, I can't get my head round it. I don't know what's legal and what isn't. But I have to make a decision pretty soon.

Can anybody help????

nsc