Bank Account Articles

Will opening an Offshore Bank Account save me money and mean I’ll pay less tax?

The important thing to remember is that if you are a UK resident then you will have to pay tax on all of your worldwide income regardless of where in the world you earn it or it is paid, so simply opening an offshore bank account is not going to help you.

Also there are many offshore banking jurisdictions that will actively share information with other tax authorities (like in the UK) if they have personal bank accounts form those who reside in a different country, so again it would not be advisable to simply open an offshore account and not expect anyone to know about it.

So why is it that we hear so much about people opening an offshore bank account and if there is no tax benefit, why do they do it?

Well put simply, if you have any foreign or offshore business activity then opening an offshore bank account is critical in ensuring the business activity runs smoothly but these accounts are very different to the personal accounts many think they need.

It is also commonly known that some individuals use an offshore company to hold their assets in which can protect themselves against things like Inheritance or Capital Gains Tax, but these structures will vary in what they offer, how much they cost and to what actual benefit they may actually be to you, as the structures can be quite complex and expensive to set-up.

The real difference between having a personal offshore bank account and a business offshore bank account is that the tax authorities can readily share information on personal offshore bank accounts but not offshore business bank accounts, so if you have a legitimate business offshore then there may be an opportunity but you would need to ensure the corporate structure is a very sound one.

We would always recommend speaking to a specialist offshore adviser before taking any action, especially when considering an offshore bank account. Try who specialise in this sort of advice.

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