UK resident tax payers with offshore accounts

[topt]

If you are normally resident for UK tax and have "private" offshore accounts you may want to check this out -

http://www.telegraph.co.uk/finance/personalfinance/expat-money/11511126/No-hiding-place-for-expat-tax-evaders.html

Singapore and China will provide info by 2018 supposedly..........

[fletchsmile]

Yes definitely a trend on info sharing, as well as widening the tax nets. Speeded up of course by our US brethren, who have you chained as a US taxpayer from birth, and are currently very keen on shortening those chains, to finance their debt mountains

When I started learning my tax, as a UK resident as long as you didn't bring your overseas income into the UK, you were fine as regards income and capital gains tax. A few years back they made it so such income was taxable even if you didn't bring it into country. Hopefully they won't go to the next step and US extreme, of once a resident national, always a taxable national, unless you renounce citizenship.

These days best to assume that your financial information will be shared, and that even if not now, likely to be at some point in the future.

Hopefully more countries will push back, but I wouldn't bank on it.

The flip side of course, is that for law abiding Brits like myself, they are making the UK less and less attractive to go back to and hence invest in. One key factor that puts us off moving back to the UK is having to pay tax on world wide investments. Thailand, Singapore etc are much more tax friendly when it comes to investing. For now it's just residents, I really hope we don't get to the US stage, where it spreads to non-residents and people end up giving up their citizenship just to move to places like Singapore.

Cheers

Fletch

Edited April 5, 2015 by fletchsmile

[Pib]

In the article there is a statement which reads: "This is known as the UK FATCA because it is based on the US model."

This is what happens when HM Revenue and Customs personnel attend U.S. Internal Revenue Service (IRS) hosted conferences...the personnel bring back new ideas on how to increase tax revenue.

[Jim walker]

I used to have an off shore bank account in Jersey C.I from my early days when I worked there and I was never a tax evader but I used to save my money in Jersey because the interest rates were better but I got caught with my bank account by the HMRC about two years ago and had to pay back tax on all my interest received so that made it less attractive for saving and I moved my savings to the bank of India but was taxed again taxed on my interest paid which I did being an honest chap is there any place I can put my savings so that I get better returns not snooped at by UKs HMRC not in some scammers bank account.

[psychobiker]

My understanding is that information is shared for UK citizens who have a UK address. For example, a UK citizen with an account in OCBC Singapore would have their information sent to the UK if they had a UK address, but not otherwise.

The risks I see are of mistakes being made or of reporting requirements getting so US like that banks etc refuse UK citizens as account holders.

[topt]

I used to have an off shore bank account in Jersey C.I from my early days when I worked there and I was never a tax evader but I used to save my money in Jersey because the interest rates were better but I got caught with my bank account by the HMRC about two years ago and had to pay back tax on all my interest received so that made it less attractive for saving and I moved my savings to the bank of India but was taxed again taxed on my interest paid which I did being an honest chap is there any place I can put my savings so that I get better returns not snooped at by UKs HMRC not in some scammers bank account.

From what you say you are still resident in the UK as far as HMRC are concerned? If you don't live there anymore tell them and you should not be taxed.........

"and I was never a tax evader" - If you still live in the UK then what you are asking sounds to me like tax evasion............

If you are just looking for safeish higher returns on GBP then unfortunately I do not think they exist.

[topt]

My understanding is that information is shared for UK citizens who have a UK address. For example, a UK citizen with an account in OCBC Singapore would have their information sent to the UK if they had a UK address, but not otherwise.

The risks I see are of mistakes being made or of reporting requirements getting so US like that banks etc refuse UK citizens as account holders.

Would they not send the passport details of any account held to the respective countries? I don't know but it seems a fairly basic step if you are trying to catch tax evaders.

Remember the article is talking about reporting from 2017 with Singapore (your example) by 2018.

[Pib]

My understanding is that information is shared for UK citizens who have a UK address. For example, a UK citizen with an account in OCBC Singapore would have their information sent to the UK if they had a UK address, but not otherwise.

The risks I see are of mistakes being made or of reporting requirements getting so US like that banks etc refuse UK citizens as account holders.

Would they not send the passport details of any account held to the respective countries? I don't know but it seems a fairly basic step if you are trying to catch tax evaders.

Remember the article is talking about reporting from 2017 with Singapore (your example) by 2018.

Below partial quote from one of the supporting articles/links in the main OP article may provide a little more insight.

The bank said the agreement with the UK “will have a similar effect (to the US Fatca) and will require us to report certain information on clients who are resident in the UK for tax purposes to the Jersey Tax authority who will pass the information to HMRC”.

Its website states: “The effect of both international agreements is that for new accounts opened after July 1 2014 we will be asking all our clients for additional information to enable us to verify their country of tax residence”.

The rules affect new Santander Private Banking clients, and existing ones who add a party to their account or open a new joint account.

Nationwide International (nationwideinternational.com), which is based in the Isle of Man, said the new UK Fatca rules mean that anyone opening a new account will have to provide details of their citizenship and where they are resident for tax purposes.

UK tax residents will have to provide their National Insurance number and those who are a resident for tax purposes of the US or an EU member country must provide their tax identification number.

[Ricardo]

I used to have an off shore bank account in Jersey C.I from my early days when I worked there and I was never a tax evader but I used to save my money in Jersey because the interest rates were better but I got caught with my bank account by the HMRC about two years ago and had to pay back tax on all my interest received so that made it less attractive for saving and I moved my savings to the bank of India but was taxed again taxed on my interest paid which I did being an honest chap is there any place I can put my savings so that I get better returns not snooped at by UKs HMRC not in some scammers bank account.

From what you say, it would appear that you were UK-resident, but forgetting to include details of your Jersey-interest in your UK annual-return ?

In which case I'm afraid that HMRC did perhaps have a point, and you were technically a tax evader, albeit doubtless innocently & unaware.

Which is why you had to pay back-tax, in the end. Lucky to escape penalties !

Most of us living in Thailand are no-longer UK-resident, although many have income arising in-the-UK, and some have enough income (from the UK) to continue to be liable to pay UK income-tax (on that UK-income, but not the rest of their world-wide income) despite being non-resident.

My own intention, having removed all of my capital from the UK/EEC a decade ago, is to keep things simple by having (when they start to pay-out) pension-income below the UK personal-allowance, and thus not ever be liable to pay UK income-tax again.

So long as you remain UK-resident, you will still be liable to declare all your offshore-income, regardless of which financial-centre it is held in, so your question "is there any place I can put my savings so that I get better returns not snooped at by UKs HMRC" is misguided. You'll still (as an honest chap) be legally required to declare that income in your annual-return.

And you correctly identify the issue of the relative-safety/security of the offshore centre/bank as also being important.

Many posters on TV are however non-UK-resident, and are only liable to declare/pay-income-tax on income arising within-the-UK, but not from elsewhere.

The Thai tax-authorities (as I currently understand things) are relatively relaxed, and only wish to tax/know-about income which is transferred into Thailand, in the same year in which you earned/received it offshore. So there is the possibility of 'seasoning' income, by holding it offshore for a while, and then bringing it to Thailand in the following year(s).

There is then the entirely separate issue of snooping & privacy. Ideally I myself don't want anyone else to know my full personal/financial information, however in this modern world there are money-laundering issues, and any reputable bank or investment-adviser will want to cover it's arse (aka 'know their clients'), so may still require information from you. Hopefully they won't then pass-it-on elsewhere.

[Pib]

This HRMC booklet called "No Safe Havens 2014" provides more info on exchange of tax related info around the world. Link. And a couple of snapshots from the booklet are below.

With all governments hungry for more tax revenue, more and more countries expanding agreements they have with other countries to share info on financial accounts, development of standardized data reporting capabilities in our internet-connected world which makes reporting easier, etc., it's probably just a matter of time before sharing/reporting of financial accounts on a worldwide basis will be commonplace. Like it or not I think the question is, just how long will it take to reach that point in time? 5 more years, 10 years, 20 years, etc. The light at the end of the tunnel is really worldwide financial account reporting coming our way.

Who has endorsed the new global standard in exchange of information so far?

(Notice countries in Southeast Asia like Thailand have not...but such emerging countries are almost always the last to join (to be pushed into joining).

What will HMRC see?

[Pib]

Since OECD standardized financial reporting is mentioned in the article, attached is the OECD Standard for Automatic Exchange of Financial Information. It identifies model agreements between countries, what is to be reported, due diligence requirements of financial institutions for pre-existing and new accounts, etc.

OECD Auto Exchange of Info Standard.pdf