Private Banking offshore question

[Lightemup]

It's pretty common for people in our business to do it for various reasons.
Although I have taxexemption from my homecountry because I dont live there anymore, Im still a bit uneasy that they might make up a rule one day and take some of my money away.

Anyone doing this private banking?

What bank can you recommend?

Minimum investments to get a HSBC private banking account on Jersey or IOM is £1.000.000 for instance and thats way, way, way out of my league...
Fairbairn Bank for instance only has £5.000...

Know of any pitfalls?

I know of the EU legislation from last year, but it should not affect me.

Send PM's if you dont want to discuss it openly.

[LivinLOS]

I am doing it.. Barclays I.o.M..

EUR / USD / GBP accounts easy.. Savings and current accounts.. Platinum barclaycards linked to current account.. If over certain amounts deposited you get a client liason team and more than a big number you get your own banker (personal relationship manager) assigned to you who you just delegate all things to and they make sure they get done.

I have had a long and checkered history with bankers and have a pretty low opinion in general but this bunch I wholeheartedly reccomend.. If you are serious about joining them (and it is reams of paper to sort out in this post 9/11 world) then PM me and my relationship manager will phone you on thier dime to discuss..

They operate IoM and jersey from the same offices these days.. Buddy uses a UK bank (Natwest ??) in Gib.. Singapore does non residents accounts and are less hassle with paperwork I understand.

[Crustasian]

I am doing mine with Bank Of Scotland Isle Of Man and had no problems.You don't need a massive amount to open a simple cheque account.You can then increase your savings gradually.They have a good web site.

[BigBill]

Try banking tax free earnings with BDG in Switzerland. They provide on line banking, debit card and credit card as well. Very safe and discreet. Swiss banks are very safe and do not worry about tax evasion however you do need to prove the economic origin of the money as they observe money laundering convention. Minimum balance is US$5000. You can bank in multiple currencies or choose between them. You can open account by mail and do not need to visit in person unless you want to bank more than $500,000

They have a web page http://www.bdg.com

[BigBill]

sorry make that http://www.bdg.ch

[Coolhand]

Have used NatWest Offshore in Jersey since the mid-80's (when I needed it), its just like a normal current account cheque book, ATM card, internet & telephone banking - couldn't be simpler. Mind you if you live near Kent and have £50m in used notes to deposit, you would probably find the boys in blue knocking on your door fairly quickly.

[H3X]

Originally Posted by BigBill

Try banking tax free earnings with BDG in Switzerland. They provide on line banking, debit card and credit card as well. Very safe and discreet. Swiss banks are very safe and do not worry about tax evasion however you do need to prove the economic origin of the money as they observe money laundering convention. Minimum balance is US$5000. You can bank in multiple currencies or choose between them. You can open account by mail and do not need to visit in person unless you want to bank more than $500,000

They have a web page http://www.bdg.com

Bill

The Swiss volunteered to partake in the EU Savings Tax Directive as a 'Third Country' effective 1/7/05. So do not be mistaken. If you are an EU 'resident' you have to declare that you have some bank interest income hidden safely away in Switzerland... and have withholding / retention tax applied.

If you are 'non-resident' in EU land and affected areas contact your bank as there is a form to fill...

H3X

[Sirgezza]

Regarding the accounts mentioned in the posts above, what is the interest rate earned?

Some time in the future, I'd like to set up an offshore account that paid about 4.5% and withdraw from the account when I was on holiday in LOS. How possible is this? In other words, do offshore accounts that allow direct access pay a good rate of interest?

[dizbuster]

Originally Posted by H3X

...The Swiss volunteered to partake in the EU Savings Tax Directive as a 'Third Country' effective 1/7/05. So do not be mistaken. If you are an EU 'resident' you have to declare that you have some bank interest income hidden safely away in Switzerland... and have withholding / retention tax applied...

That's right, a lot of people are now paying tax where they didn't use to on their savings. Even if you don't declare it, a lot of the banks now deduct the withholding tax before paying you the interest, i.e. you get interest nett of EU tax.

[Sirgezza]

Originally Posted by dizbuster

That's right, a lot of people are now paying tax where they didn't use to on their savings. Even if you don't declare it, a lot of the banks now deduct the withholding tax before paying you the interest, i.e. you get interest nett of EU tax.

I thought that people who were ordinarily resident in the UK only paid tax on on interest that was REMITTED to the UK. If I was to withdraw the interest whilst in LOS, it should be tax free.

Where does the deduction go to? EU or UK coffers? B@stards.

[Coolhand]

Originally Posted by gez

I thought that people who were ordinarily resident in the UK only paid tax on on interest that was REMITTED to the UK. If I was to withdraw the interest whilst in LOS, it should be tax free.

Where does the deduction go to? EU or UK coffers? B@stards.

No you are UK resident (unless you spend less than 6 months in UK) so you pay tax on worldwide income.
If you spend more than 3 months in the UK you are not resident, but ordinarily resident and it gets confusing!

[Denver]

Hi Keld, If you are in the LOS stay there! It's gone a bit bonkers here! Another Sunni Mosque attacked by the IPF (Police!) allegedly about 30 minutes ago! Noisy one too!

I'm with Lloyds in the Isle of Man. I'm paid in Dollars so have a Dollar account. They give me a Debit card on that account which I can use to purchase in any currency. However, they take the funds at that days $ exchange rate which might not always be the best! When moving large amounts I always have my eye on the Dollar/Pound exchange rate.

I have 24hr phone bank (Actual humans on the phone too!) and move money between accounts in the UK (GBP) and Croatia (Euro) Looking to open a Thai account when I am over next.

Had to jump through quite a few security loops to open the account initially but I think that is a good thing. No real minimum amount to open the account but a couple of hundred should be about right. I have my main salary paid into it now.

[BigBill]

H3X - Thanks for that. I am not an EU Resident so was unaware of that implication, although it does not effect me anyway.

[Sirgezza]

Originally Posted by Coolhand

No you are UK resident (unless you spend less than 6 months in UK) so you pay tax on worldwide income.
If you spend more than 3 months in the UK you are not resident, but ordinarily resident and it gets confusing!

This is not what I wanted to hear

What is the point of an offshore account then? Is it only of use for people who do not live in the UK?

[LivinLOS]

Because if your the sort who doesnt always fill in your tax return correctly the UK gov cant find out whats in the account without a court order from the country the account resides in..

Jersey and IoM dont as a rule give those out easily so unless your involved in terrorism guns drugs or prostitution the inland reveneue cant assess what you have.. If you step up the complexity to a blind company that they cant even tell if you own it or not theres many advantages.

If your income is sourced in the UK then its not as much of an advantage but if you have an overseas source of income then you can not pay taxes on money held there.

You can also do tricks like form a blind company where the beneficial owner and director are private info.. That company can invoice for your work done.. Your employer pays the 3rd party company which builds up assets.. That 3rd party pays you whatever amount you need to live or whatever amount brings you just under a tax level in the UK. You can in effect decide how much money to decalre to the UK IR each year based on your deductables.

Of course the IR HATE this and WILL pursue you and try to make life hell so you have to balance how much to give them the finger against how much you are prepared to walk away.. The Dutch assessed me for well in excess of 18 million Euros but quite obviosuly they can go whistle...

Other simple to envisage uses include having your car registered in the name of an offshore company so you never pay another parking ticket or speeding fine.. You can be 'employed' by a company you own for a small salary but the company can as part of your contract of employment agree to pay your rent or own your home and give it to you rent free.. The false employer company can give you an expense account via a credit card that no one will ever have to account for etc so your whole cost of living can be shifted into the 'tax free' side of your lifestyle.. Your hosue payments are met by your employer, your car payments are met by your employer, your basic costs of living and entertainment are on your employers credit cards, and that 'employer' is just a blind front company that never has to submit accounts.

A good specialist tax lawyer who is familiar with working an offshore structure can save even a normal mans tax bill down to small amounts.. When it comes to the well off or the really rich it makes huge differences. The hardest part is getting an employment or contract situation that pays the blind compnay in the first place, not easy as an employee, you need to be in a contract or self employed environment and HMIT does jump all over it but there really isnt much they can do.

[Mac]

For non residents the situation is entirely different but as a UK resident I did look into this when I was going to be working abroad for a while. It seemed to me, possibly wrongly, that there was quite a high associated cost with defrauding the inland revenue long term. Quite apart from the fact that you opened yourself up to blackmail.

I decided to take tax advice in England and limit my tax legally. Clearly this is not as effective as full on fraud but I sleep easily at night.

Each to his own.

Mac

[LivinLOS]

You use the term fraud there very easily.. Fraud is a criminal act, tax evasion is a criminal act, but tax avoidance is every mans right,

The items I spelled out are drastic but not illegal if structured correctly... It is entirely possible to have a corporate structure set up that you do not own but are able to manage, it is entirely legal, to have that company as your employer, and then to follow some of the steps I mentioned. You mention blackmail but I wonder from whom ?? and over what ?? That your an employee of a non british corporate structure ?? That your home or car is owned by a blind trust ?? These are not illegal activities.

These things may be unethical from the point of view of a person being part of society and not contributing his share but they are not always illegal, these are techniques the really rich use all the time and actually are not nearly as expensive as they sound.

Please show me what is illegal about forming a corporate stucture that you are not the owner or shareholder of that then performs your employment and expense payments as outlined above. A good international tax specialist (not your local accountant) can advise what the legal way to minimise your tax responsibilies are.

On one level simply having an offshore company with the ability to invoice for work done but never account for it perfectly legally (for example a Seychelles company need not present accounts for work done outside the Seychelles) is a huge headache saver in not doing all that petty accounting that tax officers can demand from an onshore corporate stucture. Handily enough a Seychelles company is an LTD and can legally have a UK address (gets complex around VAT for work done inside the UK though) so appears very 'British' if invoicing in another country.

[Mac]

Hi Livinlos

My problem was that I was going to be working abroad and I had the idea of paying my foreign earnings into an offshore account and simply not repatriating it or declaring it. This is illegal.

I am sure that your scheme has been tested by the Tax advisors and is strictly legal. But When I looked at doing something similar the costs were quite high. Also as a UK resident, normally resident, the strict terms are that any money generated in the UK or overseas must be liable for UK Tax. This is not the same if the money is being generated overseas by a non resident.

If you are a UK resident and set up a tax avoidance scheme, the fine line between evasion and avoidance can change with the vaguaries of the Chancellor. It is a criminal offence to defraud the Inland revenue. The definition of criminality is in their hands and not ours.

I was appalled for example that they are now saying that the old husband and wife company, where the husband and wife were previously taxed separately on the basis of a 50/50 dividend pay out is now illegal... All the income must now be acrued to either the husband or the wife. Bastards...

As regards blackmail. When I was getting divorced my ex-wife's lawyers were all over my books. If they had found anything suspicious at all they would have shopped me or used it as a negotiating tool.

In the Uk the Customs and Excise have powers of seizure that make any totalitarian dictatorship look positively benevolent. They can seize your goods, freeze your bank accounts and stop your credit cards with no warrant or legal papers at all. They can also enter your house without a warrant.

In the UK you can now be arrested with no charge and popped in the clink just becuase they think you might be up to something. They do not have to charge you or prove it. They can just do it. Thank you 9/11.

Stay in LOS

Best to you

Mac

[Mac]

Powers of Entry and Seizure

Enforcement of duties
Power to search premises. 25. In Part XII of the Customs and Excise Management Act 1979 (general supplementary provisions), for section 161 (power to search premises) substitute-

"Power to search premises: writ of assistance. 161. - (1) The powers conferred by this section are exercisable by an officer having a writ of assistance if there are reasonable grounds to suspect that anything liable to forfeiture under the customs and excise Acts-

(a) is kept or concealed in any building or place, and
(b) is likely to be removed, destroyed or lost before a search warrant can be obtained and executed. (2) The powers are-

(a) to enter the building or place at any time, whether by day or night, on any day, and search for, seize, and detain or remove any such thing, and
(b) so far as is necessary for the purpose of such entry, search, seizure, detention or removal, to break open any door, window or container and force and remove any other impediment or obstruction.
(3) An officer shall not exercise the power of entry conferred by this section by night unless accompanied by a constable.

(4) A writ of assistance shall continue in force during the reign in which it is issued and for six months thereafter.


Note that it has been amended

[Sirgezza]

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."

[Denver]

Originally Posted by gez

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.

Another sleepless night!..................Thanks Sir Gez! Tch!

[Sirgezza]

Originally Posted by Denver

Another sleepless night!..................Thanks Sir Gez! Tch!

Well if you can't sleep - have a look at your inbox, there might be a PM that you can reply too.