Offshore bank accounts, whats the point?

[sherbert]

if you still have to pay tax on the interest? Is there something i dont get. (well there usually is

I think it depends where off-shore, if the account is in a tax haven etc.

It depends on how the money got there in the first place. There are certain categores of income/gains which are only taxable if the money is remitted into the UK.

often used by property types - no good for us run of the mill salary slaves.

what about Jersey? MN, what catergories are these. Want to put a lump sum in a term deposit with maximum interest rate. Will then be taking the money to finace my move to oz. So could transfer money straight there.

Only really useful if you don't want to bring monies in to the Uk, or you are not subject to uk tax - so if you are not ordinarily resident or non UK domiciled. The ESD effectively ruined the tax breaks.

and who tells the tax office?I dont submit my own tax return because i am an employee.

If you are resident in the UK in any tax year and are domiciled here (which effectively means your father was born here, or your mother if they were not married, or you have chosen the UK to be your permanent home, never to leave) then you have to pay tax on your WORLDWIDE income. You can only be taxed on income remitted to the UK if you are not domiciled here, so Roman Abramovich, Mohammed Al-Fayed etc would not pay UK tax on their (eg) Jersey bank interest. Seem fair?

You have a duty to tell HMRC that you have untaxed income and therefore need to complete a tax return by 6 October following the end of the tax year in which the income arose (tax year ends 5 April each year). There is a penalty of 100% of the tax due if you do not do this.

sherbert even if you are an employee we have self assessment in the Uk ie you are responsible for deciding what tax you should pay and accounting for it to the revenue. If you don't earn much and and your employement is your only source of income and the P60 your employer gives you looks correct then you will not need to account for any more tax and the IR will probably not chase you. However if you are liable to UK tax (which you are) then you have to tell the IR and any attempt to conceal it is tax evasion. And they will beat you with a big stick if they find out.

Ah, but if i leave the country to move back to my native australia I will no longer be liable for UK tax. I could transfer the money straight to an Australian bank account.

Ah, it sounds like you are a "non dom" - a non domiciled individual. As such you are not liable to UK tax on interest earned outside the UK as long as you do not bring it into the country.

Chapter 4 of this will help you decide if you are non domiciled.