Offshore banking can be somewhat of an enigma for people
who think foreign accounts are for the seriously rich. Together
with a leading financial website www.debts.org,
we discuss the merits of offshore banking
- and find out who uses them, why
they use them and where.
What is offshore banking?
Having an account in a country other than where you
normally live is known as offshore banking. Various sectors of the
population use offshore banking facilities, including individuals,
corporations and State departments.
Why would I have an offshore
account?
With the financial climate at home being a little
unpredictable, you may prefer to bank in a country that has a
steady economy. Or perhaps you regularly travel abroad and would
like to have the convenience of a bank account in the country you
frequently visit. The majority of people, however, use offshore
accounts to manage money in the country where they own a
property - such as a holiday
home.
Having an offshore bank account can make money transfers
more convenient, especially when dealing with a number of
currencies. Or you may want to reap the rewards of high interest
rates - foreign accounts
often offer higher rates than many of the UK's high street banks.
Finally, you may be eligible for offshore tax deductions based on
your personal circumstances but this depends largely on the
account, the country and your eligibility.
For more information on the benefits of banking offshore,
visit www.debts.org/offshore_banking
Do I have to declare savings to the Inland
Revenue?
Unfortunately, yes. If you are a UK resident it is
unlawful for you to enjoy the benefits of an offshore savings
account and not declare earnings to the good people at HM Revenue
and Customs. If on the other hand you are an expatriate living
abroad, you are not obliged to declare your savings to the UK
government.
What is a tax haven?
First of all, not all countries with tax benefits are
called 'tax havens'. In reality many countries just offer account
holders better deals on certain kinds of tax, such as inheritance
tax. Whereas a 'tax haven' is a country which has low to zero tax
levels.
Which countries offer offshore tax
benefits?
Depending on your circumstances there are many countries
that offer taxation incentives. The following nations, however, are
generally considered to be the main players:
Bahamas
Bermuda
British Virgin Islands
Cayman Islands
Gibraltar
Jersey
Panama
For more information about low tax nations visit www.debts.org/offshore_banking
