What Is Offshore Banking?
Find out more about offshore banking...What is offshore banking?
Offshore banking is made up of bank accounts which are held abroad in places like Jersey and the Isle of Man, where the tax system allows returns to be paid gross.
However, you are still expected to declare the money you have in offshore banking accounts, and where applicable pay the tax due in ypur home country.
There are a number of offshore banking providers and accounts to choose from - see below to compare some leading UK offshore banking accounts and click on the links for more information:
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* GROSS RATE – The contractual rate of interest payable before deduction of income tax at the rate specified by law.
** AER RATE – AER stands for Annual Equivalent Rate and is the notional rate which illustrates the gross rate as if it was paid and compounded once each year. As every advertisement for a savings product will contain an AER you can compare more easily what return you can expect from your savings over time.
Offshore banking can benefit you if you travel a lot, or are working or living abroad.
Many expats have an offshore bank account to manage their finances, but it’s not right for everyone, and a lot of people wrongly assume that offshore banking means you do no have to pay any tax. What usually happens is that any returns on investments in offshore banks are paid gross (before tax) but you then have to declare this income to the inland revenue and pay the appropriate tax yourself.
Advantages of offshore banking can include:
- Managing your own taxation
- Investments, savings, mortgages and day-to-day banking
- Potentially higher interest rates
- Transferring money internationally
- Accessing your money from anywhere in the world
Now that you know what offshore banking is, if you think it's right for you then see the table below to compare some of the different offshore banking products available from leading providers and apply online: