British expatriates keep on course with offshore banking

The trend amongst Brits to move abroad is becoming more popular with 198,000 British citizens moving out of the UK in 2005, according to the Bank of Scotland.

Living, working or retiring temporarily or permanently overseas can mean a whole set of lifestyle changes, but the prospect faced by British expatriates of handling their finances whilst they are away can be both daunting and confusing.

Offshore banking is a wise option, but the lack of understanding surrounding this type of banking and the former stereotypes of expensive suits, flash boats and money laundering, associated with offshore centres are major deterrents.

Here, Bank of Scotland International highlights some of the key benefits of offshore banking:

Tax incentives – Offshore banking can reduce customer's tax burdens quite significantly. Interest is paid gross so that the customer can pay tax in their country of residence without being taxed at source. However, if you accrue interest in an offshore account you still have to declare that on your UK tax return. The important consideration here is that each country you live in has its own income tax laws by which you must abide.

If you are planning to move abroad, then one of the most important points of preparation you should consider is to find out what your tax status is. Please refer to HM Revenue and Customs (hmrc.gov.uk) for further information.

Useful addition to your investment portfolio – Offshore banking can provide the following product and service benefits to expatriates:

Banking – Offshore current accounts are designed so that expatriates can pay their salaries or pensions into them, deposit money into other accounts, such as a local bank account in the country that they live in and to cover any bills or expenses that they may still have in the UK.

Commission-free foreign exchange – For when customers need to convert funds from one major currency to another.

Savings accounts – Which offer the option to save in different currencies, rates and terms.

Mortgages – Tax-efficient offshore mortgages for those looking to buy a residential property in the UK.

Financial planning – Many banks also have a team of independent financial advisors, who can offer a range of solutions to help expatriates put longer term financial plans in place.

Convenience and security – Offshore banking provides convenience and security and enables expatriates to hold money in most major currencies. This offers the level of 24/7 access required by international customers regardless of their time zone.

Maintain a relationship with a UK bank – Many people feel more comfortable dealing with a well known name that has a strong credit rating and the ability to deal with its customers in English. Maintaining a relationship with a UK bank also means that expatriates will maintain a credit rating in the UK, which is important, if you are intending to return to the UK at some point.

Tony Wilcox, Managing Director at Bank of Scotland International, said: "If you are planning to leave the UK to live temporarily or permanently overseas, you need the right products and services in place. When moving abroad there are many aspects of life which these people will have to adjust to and personal finance is no exception."