Why do people have offshore bank accounts?

[Dontsaveonmyaccount]

I have just come across DH's chequebook for the above account which I knew nothing about. As SAHP, he manages the finances so I am not very money savvy.

Why do people have these accounts?

Could be a number of reasons. Is it a GBP account? Does he have offshore business interests, e.g. own an offshore company? Does he receive offshore income, e.g. rent from a holiday property? Is it for a country he often travels to?

I’ve never known an off shore a/c to have a be a cheque book. Usually all transaction are done remotely, some even in cash !

Are you expats?

Yes, offshore bank accounts do have cheque books, my uncle has one. He puts his cash there because he can avoid paying tax on it.....

My dad had a offshore chequingh account. He either abroad, I assume that’s why.

Own business? Better tax rates. Often completely legal.

UK tax payers were always supposed to pay tax on the internet from offshore bank accounts but in the past the tax systems didn’t talk to each other so tax could be dodged.
If DH worked abroad in the past it could be he wasn’t a UK tax payer for a while. An offshore bank account would be more understandable then.

Internet = interest.

@IbizaToTheNorfolkBroads

My dad had a offshore chequingh account. He either abroad, I assume that’s why.

“Either” should read “worked”.

Tax haven, presumably. Cayman or British Virgin Islands?

Tax reasons I think but the real issue is he has an account you know nothing about and know nothing about the finances in your relationship.

To hide money, avoid paying tax? Or as pp have said it might be work related.
However, you need to get up to speed with your family finances. Suppose something happened to your dh? Would you know about life insurance, mortgage, tax, house insurance, investments?

To avoid paying tax in the UK, usually. It may be legal but I don't think it's moral.

Offshore or just not Uk-based? They’re very different things.

@Burnamer

Offshore or just not Uk-based? They’re very different things.

Yes, this is an important point to clarify. If it's offshore, it's worth checking if his life insurance is up to date. If it's a regular foreign bank account, it's less exciting but just as interesting so well worth asking him the obvious questions.

To avoid tax generally but can be other reasons. I'm guessing he earns a lot

If I were a SAHP, I wouldn't be happy that there were any accounts about which I was ignorant. You're meant to be a partnership.

What country? I have bank accounts in four different countries, but DH and I are two different nationalities, live in a third country, and spend a lot of time in a fourth! But a bank account in the Caymans would mean something v different!

What country and does he have an obvious connection to it?

We’ve done a few expat assignments and DH isn’t originally from the U.K. so we have accounts in 4 different countries. I also know a few accountants that have worked in places like the Cayman Islands when newly qualified, I’ve never asked but they probably have bank accounts there!

Has he ever worked offshore? Does he own a company that is structured with offshore entities?

I live in Cayman and you can only open an account here if you’re resident (or have been resident).

British residents can't just open offshore accounts and not pay tax, FYI. Contrary to popular belief, that is just illegal.

@Duckrace

If I were a SAHP, I wouldn't be happy that there were any accounts about which I was ignorant. You're meant to be a partnership.

It sounds like it's her husband who is the SAHP.

We visited the UK about 6 months before our move here. Naively I'd thought we might be able to open a bank account here in anticipation of our move, to transfer savings into etc. I was however offered the option of opening an "offshore" account which several main banks offered in Jersey or similar. We might then have been able to convert that account to an onshore one once we were resident. As it ended up we didn't bother trying. Had we had one we might have kept it, don't know.

@OneEpisode

UK tax payers were always supposed to pay tax on the internet from offshore bank accounts but in the past the tax systems didn’t talk to each other so tax could be dodged. If DH worked abroad in the past it could be he wasn’t a UK tax payer for a while. An offshore bank account would be more understandable then.

That’s not correct. Interest can be accrued offshore and remain untaxed.

@grumpytoddler1

British residents can't just open offshore accounts and not pay tax, FYI. Contrary to popular belief, that is just illegal.

@grumpytoddler1 No it bloody isn’t, I do it every week for my clients. What on earth are you talking about.