Optimise Savings with an Offshore Account

By: Isla Campbell
Submitted: 2008-10-07 18:08:02
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If you’re thinking of setting some money aside for savings you ought to investigate the option of offshore banking. You don’t need to live or work abroad in order to qualify for access to offshore accounts. If you live and work in the United Kingdom you can still set up an offshore savings account and reap the rewards of doing so. Whether you work and live in Britain or abroad, are planning for your retirement or simply want a safe haven to stash your savings, offshore banking might just offer the choices you have been looking for.

The main attraction of this type of saving relates to the tax rules that govern offshore accounts. Interest accrued on savings in an offshore account is paid gross without income tax being deducted. Interest paid on the gross amount will total more thereby producing a more sizeable final payout. Although offshore banks do not deduct tax from your savings this does not mean your offshore finances are tax-free.

If you live and work in the UK and bank offshore, the interest earned from money held in your offshore account is classed as taxable income and must be declared on the self-assessment tax returns which are completed at the end of each tax year. Failure to declare interest gathered may result in a hefty fine by Her Majesty’s Revenue and Customs, who have clamped down on tax evaders in recent years. If you live and work outside of the UK you should seek local tax advice to see if you need to pay any tax in your country of residence.

There are many other benefits offered by banking outside of Britain. Many savings accounts are multi-currency which enables you to deposit money in sterling, Euros or dollars and withdraw cash in any country. Whether you’re doing business in Berlin, travelling in Tuscany or working in Wales you can carry out financial transactions as normal with no disruption to your service. Unlimited access to your account is also useful if you’re a globe trotter and frequently move through time zones.

Some offshore savings accounts reward customers with higher rates of interest if advance notice of a withdrawal can be given. Generally speaking, the longer the notice period you give, the higher the interest you earn so think carefully about this before making your final decision on which account to opt for.

It's also worth remembering that offshore banks are not covered by UK legislation so it pays to shop around for a reputable institution. Look for a competitive interest rate but if it sounds too good to be true it usually is. Exercise the same caution when banking offshore as you would usually.

Anyone is eligible to apply to open an offshore savings account with the minimum deposit required generally resting at £5,000. Therefore, why not make the most of your money and enjoy the flexibility afforded by depositing funds outside the UK?

Isla Campbell writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

Article source: Expert Articles

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