Inbetween downloading porn, I did a quick search on the internet. It's bad news unless you are NOT domiciled in the UK. It looks like if you open an offshore account and are a UK resident, you SHOULD pay tax on the interest you receive, irrelevent of whether or not that interest is sent to the UK. My idea of spending it in LOS is therefore fcuked, unless I become a non-uk resident. You just can't win if you do things by the book.
The following was published by Kingston Smith, a top 20 Chartered Accounting firm
Press Releases
17 August 2005
Inland Revenue targets offshore accounts
Individuals with offshore savings accounts are being targeted by the Inland Revenue, warns top twenty Chartered Accountants Kingston Smith. This initiative aims to eliminate tax evasion through foreign bank accounts and has been introduced following the EU Savings Directive which came into effect on 1st July 2005. Under this directive most EU member states have agreed to provide information on individuals' bank accounts to the appropriate authorities (in this case the Inland Revenue) in other EU member states.
Andrew Shaw, personal tax partner, Kingston Smith explains: "The individuals concerned will receive a letter from the Inland Revenue enquiring why they are not paying tax on their offshore accounts. If they do not comply they may have their affairs investigated. It is a common misconception that offshore accounts are tax free, but this is not the case. Unless you have 'non-domiciled' tax status you will be liable for income tax on any interest earned on offshore accounts. Individuals are categorised as being non domiciled if they have not made the UK their permanent home and they are therefore only taxed on income and capital gains brought into the UK, allowing them to build up their untaxed wealth offshore. This is no doubt part of the Inland Revenue's ongoing crackdown on non compliance leading to them investigating more cases."