Offshore account benefits for UK expats

Published:  16 Mar at 6 PM
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Deciding how to organise expat banking needs in order to give easy access to cash held outside the new country of residence can be a trying aspect of planning for a new life abroad.

Offshore accounts are often the first option on the to-do list necessary for a smooth transfer from the home country to the chosen expat destination, whether the move is for retirement or for a new job overseas. One thing’s for sure, many expats now feel safer in these difficult days knowing the bulk of their savings is in a secure offshore bank rather than in an unknown bank in their new country.

For British expats planning to become non resident as well as non-domiciled, there are tax and other advantages linked to using an offshore bank, especially now that a number of high street banking names no longer welcome customers who don’t live full time in the UK. Even long-term UK account holders are now being told they’re no longer welcome once they’ve moved overseas.

For retirees drawing the UK state pension, it’s possible to have the monthly amount sent to an overseas bank, but keeping it offshore in sterling can protect against currency fluctuations if the amount isn’t crucial for living expenses. UK non-residents with offshore accounts will benefit from the fact that they’re protected from income tax on savings interest, although present-day low rates have taken the shine off the benefit as a source of extra cash.

For those planning to move abroad for whatever reason, it makes sense to move funds offshore at the time of or as soon after the move itself as is possible, provided the date on which interest is credited is delayed until the account holder has become non-resident and funds are outside the jurisdiction of the Inland Revenue. By doing this, the interest earned is not received in the UK and is therefore tax exempt.

Offshore accounts are especially useful for expats who intend to move between countries and are able to leave their funds untouched in order to accrue tax-free interest. An account based in, for example, the Isle of Man or the Channel Islands gives convenience and a neutral place to store funds.

Another advantage of going offshore is that most non-UK accounts are intended for expats with international careers and offer a good range of currency options geared to borrowing and saving. Finally, and to the relief of many expats living in developing or third-world countries, most offshore banks will send debit cards direct to overseas addresses, unlike UK banks.
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