Legal Information Centre


14 August 2008 by Mary Heaney

Offshore

The old image of the wealthy hiding stashing their loot in offshore tax havens in the Bahamas is largely a thing of the past...

The old image of the wealthy hiding stashing their loot in offshore tax havens in the Bahamas is largely a thing of the past as successive crackdowns by the UK Treasury and a concerted campaign by many of the old tax havens themselves to clean up their image has significantly reduced the offshore tax planning options for all but the wealthiest clients.


Do offshore banking centre still exist?


Squirrelling your funds away in some of the other traditional 'secret' banking centres, such as Switzerland and Luxembourg, has also become much more difficult since the European Union's Savings Tax Directive required all EU countries and European jurisdictions, such as Switzerland and the Channel Islands, to provide information to EU countries' tax authorities on their citizens' deposits held there or levy a flat-rate 'withholding tax'. The Inland Revenue has also recently won a landmark court forcing a major bank to disclose the names and assets of its offshore account holders.


Staying on the right side of the Inland Revenue


Nevertheless, for the right people such expatriate works and non-UK nationals, offshore bank accounts and trusts can still be useful, and legitimate, tax-planning tools. However, the increasingly strict rules about holding assets offshore means that professional advice is crucial if you are to remain on the right side of the law. For smallish sums of money, it is unlikely that the cost of this advice will make it worthwhile sending it offshore.





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