Offshore account with debit card - Where?

Exactly what tax benefit do you expect to gain by this?

How would the answer to that question affect which offshore banks issue debit cards?

I know that HSBC in Jersey issue Switch cards.

Chris

And Barclays International offer multicurrency accounts with dollar/sterling debit cards etc based in the Isle of Man, but the posters point is still valid - what possible tax benefit could somebody hope to gain without attempting tax evasion? If the OP is super-rich then there may be a case, but if he was I doubt he would be posting the query to uk.finance - he would approach his banker!

MC

I was interested to see if I could take advantage of it myself!

The tax benefit is that, because I am not UK tax resident, I can spend money outside the UK without being liable for income tax on it.

If your tax status confers that benefit, then it will do so irrespective of where the funds are held.

I don't think that is correct. As far as I know, income tax liability arises upon a 'remittance' of funds into the UK. Search for 'remittance basis' and 'non-UK domiciled individuals'. I really should check this with a tax professional.

Not quite. If the funds are held in the UK then it is first taxable in the UK, you claim a refund of that tax from the IR, which may not be the full amount paid, then declare the income in the country of residence (assuming it has a worldwide income rule which most do) have someone work out how much tax is due taking account of any double taxation relief available on the UK interest unrefunded (which much advice I've had says is none, but I've reason not to believe that advice) and then hand over the rest.

Personally I'd rather not have to jump through so many hopos to stay honest in my country of temporary residence given that I don't want to take the risk of converting the money into Euro (or whatever) before investing it. It's thus unsuprising that many people living in a foreign country don't declare they investment income from their home country to their host country

Of course if your total UK income is less than the personal allowance you can fill in the form to have interest paid gross in the UK and make the system much simpler, but if this isn't the case I believe that you cannot use this form and you are stuck with the above.

I will be really happy if somone thinks that I am wrong and can show me a better way

tim

I think we're talking at cross purposes. I didn't think we were talking about tax on interest on UK held deposits, but simply about the primary funds themselves. Surely there is no way remittances from abroad can be treated as income and taxed accordingly unless it is first established that the person concerned is liable for UK income tax in respect of them.

In message , SpookyTwin writes

If you are resident, for tax purposes, in an EU country and the account is held in any other EU country or IOM or CI then the tax benefit will change from next July.

I think an amount of confusion has crept in.

Let me, as the original poster, clarify what I am talking about.

If a person (me) is domiciled outside the UK, but temporarily resident in the UK, they are not liable for UK income tax on salary payments, unless they are "remitted" into the UK.

Such a remittance can take the form of spending the money in the UK, importing goods into the UK, or transferring the money into a UK bank account.

Liability to income tax in the person's home country is a matter which I shall not consider here. Liability to tax on interest is also a minor detail.

Now if the person wants to have easy access to his money worldwide, and is paid in GBP, he might wish to hold it in an offshore sterling account, whence he could spend it outside the UK, or transfer it onwards into a UK-based account and at that time pay UK tax.

I believe all this to be above board, and am currently looking for suggestions as to banks who might provide such a service.

If I am barking up the wrong tree, please correct me.

John, can you please expand on this? Where would the liability arise? Can you refer to any legislation or budget announcements?

I am vaguely aware of EU changes on the taxation of interest of source, but this is not the primary issue in this case.

As I said, perhaps I should consult with a knowledgeable tax adviser. Any suggestions as to how to find one?

AIUI this is not correct (assuming that you are UK employed, not just on holiday).

You are not liable to UK tax on income unrelated to your UK employment unless it is remitted. You are liable to UK tax on income related to your UK employment regardless of where it is paid.

I believe it to be wrong.

done

tim

In message , BabyRabbit writes

Initially, the tax will be deducted in the country where the account is held and 75% of the tax deducted will be remitted to the country of residence, in due course the information relating to the interest paid will be passed to the country of residence, instead of deduction at source, where a tax liability will arise.

The EU Savings Tax Directive

No, you dont think Gordon publishes important stuff that way do you ? :-)

Does this mean that a normal UK resident can go abroad for 6 months, say the Middle East, earn some money leaving it offshore, and not be taxed on it provided it remains offshore?

I thought you had to be out of the UK for some years to achieve that.

no.

You need to do much more. You must change your domicile to a different one. This is far from trivial.

tim

In message , tim writes

Changing domicile is quite different from changing residency. You can avoid UK Income Taxes and CGT by changing residency but still get caught for IHT You need to lose UK Domicile for that and this involves cutting ALL links with UK