Whats the future for Offshore Savings Accounts?
The EU has recently brought pressure to bear on jurisdictions which served as a tax haven for European investors. The acceptance of new practices by Jersey, Guernsey and the Isle of Man means that the days when investors could take their interest on accounts tax free and ‘forget’ to declare it to their home country’s tax authority have gone. The OECD has also issued lists of ‘non-co-operating tax havens’. Now savers will either have to accept a ‘withholding tax’ being automatically applied or give permission for the offshore bank to declare the interest to the investor’s tax authority. Offshore accounts are, of course, very popular with expatriates and not just for tax saving reasons. Their right to avoid paying tax may be quite legitimate yet they will still be subject to the same withholding practice. So will this mean a drop in business for British banks such as our clients Lloyds TSB, or other major players such as HSBC and RBS? A lot depends on how these banks promote their accoun
