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UK Inland Revenue now has access to some off shore bank accounts.


Beryl

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This is all to do with offshore account holders attempting to evade UK tax.  HMRC has always had wide ranging powers to tackle tax evasion.

Ever since the Money Laundering Regulations were introduced in 1973 to combat international drug trafficking , all EU financial institutions have been obliged to take proper steps to identify their customers and to report suspicious transactions to the authorities.  In the UK, this was extended by the Proceeds of Crime Act under which transactions suspected of having been derived from any serious crime are to be reported.  So, if your bank sees transactions coming through your account which are inconsistent with what should be expected, then they are obliged to investigate and if appropriate, to report it.  The law exempts financial institutions from their confidentiality rules so they cannot be sued in the event of legal disclosure.

Anyone with a properly declared and maintained offshore account will have no concerns.

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I think the Revenue are being a tad optomistic with the amounts they

hope to collect.  They seem to have this idea that most offshore

accounts  in the CI or IOM are held by UK taxpayers who are

syphoning income away from the  UK tax authorities.  The

reality is  that most of our offshore accounts are held by non UK

resident  individuals  - who wouldn't be paying UK tax on

their  interest anyway.  Talking to colleagues from other

banks  they are of the same opinion.  I think this government

just reads 'evasion' when ever it sees the word 'offshore'. 

However, I would add that the Revenue can already get details of

interest paid on all accounts in Europe under the EU Savings Directive

- whether or not the account holder is resident for tax in that

country.  The Revenue are also widening their powers for obtaining

information generally from banks etc - so if you are 'on the fiddle'

better be careful - they have ways of finding out...

Kathie

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[quote user="hastobe"]I think this government just reads 'evasion' when ever it sees the word 'offshore'.  [/quote]

Isn't it also that the media often concentrates on and reports the evasion angle? 

The BBC report comments:   " HMRC can barely disguise its glee at the legal victory it won at a hearing before the Special Commissioners in February. "   It's not exactly unemotional language.

Anyway, there's always Luxembourg or Lichtenstein... Switzerland's now rather passé... [6]

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[quote user="catalpa"]

[quote user="hastobe"]I think this government just reads 'evasion' when ever it sees the word 'offshore'.  [/quote]

Isn't it also that the media often concentrates on and reports the evasion angle? 

The BBC report comments:   "

HMRC can barely disguise its glee at the legal victory it won at a

hearing before the Special Commissioners in February. "  
It's not exactly unemotional language.

Anyway, there's always Luxembourg or Lichtenstein... Switzerland's now rather passé... [6]

[/quote]

LOL too true!

Kathie

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The EUSD requires banks etc in the EU to provide details of

the interest paid to all account holders resident in the EU (and other reportable

countries - e.g. BV Islands, Cayman Islands etc) with effect from July 2005. 

Note that this report is based on the address of the account holder - not the location of their account. 

Previously banks didn't have to report accounts held by

non-residents where interest was paid gross - the report was

essentially a return of interest where paid where tax had been deducted

at source. Most non-residents have an R105 in place and so receive

their interest gross.

As an alternative to making the return, some territories (e.g. Isle

of Man) have elected to simply apply a withholding tax to interest

paid.  For certain products the withholding tax can be avoided -

hence no tax cost to investor and no information back to the EU tax

authorities.  The

recent case bought by HMRC against Barclays, requires Barclays (i.e.

the UK resident holding company - which is subject to UK tax law) to

disclose information in respect of customer accounts held by its

subsidiary offshore deposit taker.  If the interest paid was

required to be returned under the EUSD, the case wouldn't have been

necessary.

Kathie

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