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?

Offshore accounts can be opened and have assets transferred to them. I move assets ‘offshore’ quite legally and legitimately.
As the tax laws are different (and more harsh) for money brought back onshore, this isn’t always the best thing for people to do. It can however be a good planning move for high net worth individuals.
I would expect an offshore account like this to be Jersey, or Isle of Man, or even Dublin. I use IOM.

I would wonder WHY he had assets you don’t know about though.

I'm not saying they can't open the account, of course they can.

What I'm saying is that UK resident and domiciled individuals are taxable on their worldwide income and gains. If they are opening offshore bank accounts and earning interest, they should be declaring it.

Of course there are some exceptions, such as offshore bonds that don't become taxable until they pay out, or bank accounts opened by non-doms.

I am just in the process of helping a client who 'forgot' about interest from his Chinese bank accounts and HMRC came after him. If you can, as a UK resident and domiciled person, legitimately open accounts offshore and not pay tax on the interest, then HMRC certainly don't think so.