Off-shore banking
Discussion
I don't know too much, but if I were to open an off-shore account I preseume they would pay me interest Gross rather than Net and that I would then pay my tax when it was brought back into the UK?
So, if I put money in there now and left it to accumulate interest for say 10 years, and then brought it back in lumps once I have retired when I am back as a 22% tax payer, would I then pay only 22%? And if so, would it be only on the interest portion?
Always thinking! You ain't seen me.
darreni said:
Used to be the case, until the european tax directive came into force last year. Now the banks are obliged to pass details of yor account to the inland revenue.
Offshore wrapped bonds however, work as you describe...
Offshore wrapped bonds however, work as you describe...
That's not yet the case as I understand it. You have the option of remaining anonymous, but they levy a withholding tax (fairly minor, but growing annually) on your interest and give it to your country of domicile. However, the tax man won a major victory against Barclays last year forcing them to disclose the UK residents with international, offshore accounts. This is the chip in the facade that will bring the offshore banking system into line progressively within the EU.
The exception will always be Switzerland, plus maybe Lichenstein and other small principalities. They will never surrender banking secrecy, so just stick with the withholding tax system.
Moral of the story is, channel island stuff will have a limited life span before disclosure is obligatory. Head further afield or Switzerland. Problem with the latter is that they're not really interested unless you have a fair bit of wedge to invest.
Leftie - if you are a UK tax resident, you are liable to UK tax on your WORLDWIDE income. If you have a personal bank account in an overseas bank and that bank is paying interest into that account, you are liable to UK tax on that interest and you are legally obliged to disclose this interest in your annual Self Assessment tax return. This is not a new thing - it has always been a requirement that UK tax residents declare their overseas income.
Of course, in the past, many individuals chose not to declare this type of income, which was and is a criminal offence, but they felt secure that the income would never be "discovered" by HMRC as long as it wasn't overtly remitted into the UK.
Most countries have now signed a pan-national agreement which will ensure that penal rates of witholding tax will be taken from such interest if the tax payer doesn't confirm to the oversaes bank that they will be declaring the interest received on their returns. Tax havens such as the Channel Islands, the Isle of Man and Switzerland have all agreed to partcipate in this disclosure scheme.
Of course, in the past, many individuals chose not to declare this type of income, which was and is a criminal offence, but they felt secure that the income would never be "discovered" by HMRC as long as it wasn't overtly remitted into the UK.
Most countries have now signed a pan-national agreement which will ensure that penal rates of witholding tax will be taken from such interest if the tax payer doesn't confirm to the oversaes bank that they will be declaring the interest received on their returns. Tax havens such as the Channel Islands, the Isle of Man and Switzerland have all agreed to partcipate in this disclosure scheme.
Edited by Eric Mc on Thursday 12th April 23:46
Eric Mc said:
Leftie - if you are a UK tax resident, you are liable to UK tax on your WORLDWIDE income. If you have a personal bank account in an overseas bank and that bank is paying interest into that account, you are liable to UK tax on that interest and you are legally obliged to disclose this interest in your annual Self Assessment tax return. This is not a new thing - it has always been a requirement that UK tax residents declare their overseas income.
Of course, in the past, many individuals chose not to declare this type of income, which was and is a criminal offence, but they felt secure that the income would never be "discovered" by HMRC as long as it wasn't overtly remitted into the UK.
Most countries have now signed a pan-national agreement which will ensure that penal rates of witholding tax will be taken from such interest if the tax payer doesn't confirm to the oversaes bank that they will be declaring the interest received on their returns. Tax havens such as the Channel Islands, the Isle of Man and Switzerland have all agreed to partcipate in this disclosure scheme.
Of course, in the past, many individuals chose not to declare this type of income, which was and is a criminal offence, but they felt secure that the income would never be "discovered" by HMRC as long as it wasn't overtly remitted into the UK.
Most countries have now signed a pan-national agreement which will ensure that penal rates of witholding tax will be taken from such interest if the tax payer doesn't confirm to the oversaes bank that they will be declaring the interest received on their returns. Tax havens such as the Channel Islands, the Isle of Man and Switzerland have all agreed to partcipate in this disclosure scheme.
Edited by Eric Mc on Thursday 12th April 23:46
No hiding place :sad:
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