offshore account for uk citizen implication?

oceanic

Hi

I was wondering what the Inland Revenue Serice and the Laws postitoin is with a UK citizen (me with a british passport) having an offshore account.

What i want it for mainly is a place for me to store money and get interest so that inflation doesn't eat it up without having to declare it i.e. make filling in forms more complicated.

Its not going to be an income earner just a way for me to slowly over the next few years/decades save up money, without having to complicate things.

Any help, any books recommended, websites anything would be appreciated.

P.S. I heard to achive the real benifits of offshore account/tax free income earnings for a british citizen they might be better of changing nationality?

I also have a family member who has a foreign passport, but as far as i know for all intents and purposes has been treated by the government no differently than i have. Would opening an offshore account be more suited to them?

CIS

AFAIK as i know you cannot put the cash abroad if its earned here without paying tax on it first.

All interest must be declared as earnings for tax purposes.

HMRC are cracking down on offshore accts:

http://news.bbc.co.uk/1/hi/business/4102666.stm

brantwood150

oceanic wrote:

I was wondering what the Inland Revenue Serice and the Laws postitoin is with a UK citizen (me with a british passport) having an offshore account.

Anyone can open an offshore account. However, as a UK resident you must declare your worldwide income, not just your UK income, when completing a tax return.

oceanic wrote:

E.g. for instance you cannot claim some types of benifit/discounts/rent/ if you have savings of above a few thousand in your domestic bank account. (which is an unfair, when you consider the fact that someone else who earned the same as you didn't bother to save their money, was loose with it and threw it away can claim that benifit/discount whilst you can't, you're forced to spend your hard earned savings). These kind of things.

Errmm. I think you'll find that this is called benefit fraud. If you have savings, and you claim a means tested benefit, you have to tell DWP about the savings when you make the claim. This would apply regardless of whether the account is onshore or offshore.

oceanic wrote:

P.S. I heard to achive the real benifits of offshore account/tax free income earnings for a british citizen they might be better of changing nationality?

You need to lose your UK tax resident status to make the income in the offshore account free from UK tax. The problem is that in order to lose your UK tax resident status, you will almost certainly become tax resident somewhere else and they will tax the income instead; unless of course you move to one of the remaining tax havens, or keep moving country often enough to avoid becoming tax resident under the domestic laws of each country.

oceanic wrote:

I also have a family member who has a foreign passport, but as far as i know for all intents and purposes has been treated by the government no differently than i have. Would opening an offshore account be more suited to them?

Without knowing their specific circumstances it is difficult to say because taxation of UK resident, but non-domiciled, individuals can get complicated.

Cook_County

http://forums.moneysavingexpert.com/showthread.html?t=74438

BFG_2

It's called fraud...and good luck to you.

An anagram of politicians is 'lying thieving scum.'

Cook_County

Nationality is irrelevant. If you are domiciled outside of the UK you pay tax only on income arising in the UK and Republic of Ireland or remitted to the UK.

For benefit purposes income worldwide is reportable, domicile is irrelevant.

Fraud and theft are criminal activities. No offshore bank would accept money that was to be held for criminal purposes.

oceanic

who said anything about theft, if i was wanting to commit benifit fraud i wouldn't ask for legal issues surrounding offshore accounts.

I was thinking of legal ways to avoid that stuff, since i don't know much about laws thats why i asked, for instance that if you have earned money in uk, paid the taxes on them and now its become yours. Then you move it to an offshore account, say you don't earn interest on it, then i was thinking that maybe the laws says you don't have to declare it anymore like in US.

Something like that.

So basically there's no benifit to an offshroe account for a uk resident, bloody IRS, and their blood sucking ways all just to pay for bloody big wages of bloody big politicans and bloody big train/tube/housing/arms/ companies.

We're doomed to a life of poverty.

oceanic

ooh that link that Cook_County gave has something (i'm not clear exactly) that you might not have to declare or get taxed (not sure?) on the money in an offshore account unless it enters the uk?

Could someone explain this more, as that is a possibility for me. I live in the uk though, but plan on retiring abroad if possible (whole point of acquiring savings).

Also would interst be considered interest (the type that is declarable) if it was at the rate of inflation?

2nd scenario Would i have to declare my savings if say i was earning no interest on them?

Also there are these accounts that pay interest yearly, so hypothetically what happens if those banks started paying the interst at every ten years, do you have to declare the interest on the tenth year (since no money enters your account until that year hence no income earned i presume) or do you have to declare it yearly even though you technically don't have that money.

Lastly in account languages what does domiciled and remitted mean?

Sorry for bombarding you guys like this, help appreciated. I'm looking for legal ways to save money.

oceanic

nemo183

Nothing wrong with any UK citizen opening an offshore account.

However:

1) It is declareable for UK tax purposes
2) It probably offers a lower rate of return than a UK account
3) If the Bank goes bust, kiss goodbye to your cash.

On the other hand:

If you start an overseas trading company, and none of the transactions involve the UK, you have no legal duty to declare the account to the Inland Revenue.
BUT, you have no legitimate way to remit these funds to the UK, without paying tax. And in any case, many offshore banks will now apply a "withholding" tax in lieu of personal taxation.

Should you have a vast amount of money, I'd suggest buying a copy of exchange and mart, and seeking the advice of the company with the biggest ad.

I'd then recommend you take their advice, and set up your own arrangement directly with the offshore companies they suggest, and the bank they suggest. This is likely to cost you around 30% of the fee they would charge for the same thing.

Finally, if I read your initial posting correctly, what you are suggesting is fraud. Where I live, SE London, hardly a week goes by without the benefits agency prosecuting people for fraudulently claiming benefits, whilst holding overseas assets in their name.

ahorrando

Hi,
I might be late for the thread but anyway:
The inland revenue web site has very clear information about the tax implications of any money "gained" overseas (intersests in you case).
If you live in the UK for most of the time, there is no legal way of earning interest abroad without paying tax in the UK for that money (even if you leave the money there).
This is a common situation for canadians, americans and most europeans; worldwide taxation on all income.