The Panama papers became famous and started a whole storm of disputes about offshores. Still, it’s considered useful to have an account outside the country you live in, and the matter isn’t only in hiding your money from taxes.
Offshore account will serve you well if you plan to move, work, and live abroad. According to Mark Giddens, tax partner at the accountant UHY Hacker Young, having an offshore account is legal. It’s useful to have one when you need to pay bills for an overseas house or other property, or help your family that lives there.
So what is actually an offshore account?
As you can see in its name, it’s an account opened in a bank within a country different from the one you live in. Most of the high street banks like Barclays and HSBC, as well as some private organizations, allow their clients to open accounts within the banks of the Channel Islands, Gibraltar and Cyprus.The accounts hold different currencies, so you do not have to worry about fees on overseas payments and transfers. Lloyds’ International current account, for example, which is based in the Isle of Man and Gibraltar, offers free international transfers in dollars, euros and sterling, which means you avoid foreign currency charges. There is a monthly fee of £7.50, though.
How do I open an account?
Banks typically require applicants to hold a certain amount of savings or investments with them. The HSBC Expat account, for example, has a minimum “relationship balance” of £60,000 . HSBC declined to provide other details of its offshore services but said all clients were “thoroughly vetted”. Lloyds requires offshore account holders to have an income of at least £50,000 a year or to have at least £25,000 invested or saved with the bank.