What are the advantages and disadvantages of offshore banking?
The answer depends on which country you live in. In the UK it can be advantageous to have an offshore bank account denominated in foreign currency. You would do this becase if you transacted often in, for example, US$ and didn’t want to be affected by day to day currency fluctuations. Alternatively, you may want to hold a bank account in a country that has a much higher rate of interest – New Zealand is a popular example. There is no tax advantage though as you are obliged to declare the interest in the UK and pay tax on it (there are issues about double taxation agreements so it is not that straightforward!) For most average people there is no great advantage to an offshore account.
