Offshore Accounts May Mean More Tax For You

04.07.11

Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

From July this year, if you are an EU resident and have not elected for disclosure of information to the taxman of the country in which you are living, then any offshore interest attributed to you

From July this year, if you are an EU resident and have not elected for disclosure of information to the taxman of the country in which you are living, then any offshore interest attributed to you (whether you withdraw it or not) will be liable to a withholding tax of 35% under the Savings Tax Directive. In a large number of countries the general tax rates are lower than this, so we are now at a stage where many investors would pay less tax by declaring their offshore interest rather than not doing so.

Whoever would have thought that the time would come when, for many, keeping money offshore would mean that they pay more tax? Well, that time has arrived.

For whatever reason, some investors will still not want to elect disclosure of information to their local tax authorities. Many who are fiscally nomadic, i.e. they are not tax resident anywhere, will not have a local tax office and therefore cannot avoid withholding tax at 35%.

The question is whether there are any ways which you can legitimately not pay tax locally in the country in which you are living and also not be liable to 35% withholding tax?

The answer is yes ? currently the withholding tax of 35% only applies to assets which are held in your own name. Secondly, there are investment structures which legitimately protect you from local taxation in the country in which you are resident or if you are fiscally nomadic.

Note that both the Isle of Man and Guernsey no longer offer the withholding tax option and apply disclosure of information on all EU owned accounts.

Contact us now if you wish to protect your assets from tax.

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Have a General Enquiry?

Get in touch
Expand Form