Offshore Savings Accounts
What are Offshore Savings Accounts?
Offshore savings accounts are savings accounts which are run from the Channel Islands or the Isle of Man. Many of these are operated by subsidiaries of the major banks.
There are different types of offshore accounts which satisfy different needs.
- Euro accounts let you make transactions in euros and can be useful if you are planning on moving to a European country or if you get paid in euros. US Dollar accounts are also available.
- Deferred interest accounts allow you to plan interest income around your tax liabilities. Most pay interest only when you close your account, but some providers allow you to defer all or part of your interest without the need to close the account. This means you can plan your tax liability in the year as it suits you, eg when other income dips.
- Many institutions provide expatriate accounts which are especially designed for those residing in a country other than that of their legal residence
- It may be possible to operate these accounts via a branch, telephone, post or the internet
Who are they Suitable For?
Offshore accounts come with the normal considerations for setting up savings accounts and so will be suitable for different people. You can set up the accounts even if you live and work in the UK as a UK resident.
- Offshore savings may be notice accounts or no-notice accounts. Have a look at our guides for these types of savings plan.
- You can get annual or monthly income. Monthly income accounts may suit you if you are looking to use interest payments to supplement your regular income.
- Accounts can be fixed interest or variable interest.
What to Look Out For
- You need to make sure that you declare the interest earned on your offshore savings. Her Majesty’s Revenue and Customs are clamping down heavily on this and are fining people who they feel have been hiding taxable income.
What to do next
Get a feel for the Key Factors to Consider when choosing a savings plan, so you can go in knowing what you’re looking for.
Then compare notice savings accounts to find the best deals around with our best buy tables or product searches.
Moneyfacts.co.uk has also put together a range of savings guides if you are looking around for other types of savings plan.
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