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What are offshore accounts

Offshore accounts are basically bank accounts, which are held in a bank outside of the country where the owner lives. Offshore accounts are most typically held in countries considered to be a "tax haven", this means they usually have low tax regulations that offer the account holder financial advantages. These advantages range from more privacy surrounding their banking to low or even zero tax on their savings and interest.

The term "offshore" originated in the Channel Islands, as places such as Jersey or Guernsey were considered away or offshore from the rest of the country. Modern times have seen this phrase used as a blanket term for any account which is in situated in a different country to its owner.

As well as being linked to the rich and famous, offshore accounts have, in the past, been linked to criminal activity, with many gangsters choosing to evade their country's taxes by opening one. These days, although many of the benefits remain, offshore accounts are now at the mercy of the account holder's country and any associated taxes if inspectors choose to delve deep enough.

One of the most solid benefits of holding offshore accounts is the financial stability they can offer an account holder. If you live in a country with much political instability and fear you may have your savings stolen or removed, an offshore account can offer relative safety. Most offshore accounts are able to offer interest rates that are far superior to anything a bank or building society could offer in the UK. Meaning your savings will grow quicker, especially with the associated tax benefits.

Offshore accounts also have certain services attached as standard, which are not available in the UK. These services include low rate loans, advanced investment offers and anonymous banking.

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