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Offshore Banking Question

Offshore Banking Question

Old Oct 9th 2002, 7:37 am
  #1  
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Default Offshore Banking Question

Here is a question about tax on income paid into an offshore account.

I receive £1,000.00 a month from renting out a property in the UK. That money is paid into an account in the Channel Islands to get the best possible interest.

I wire £500.00 to my Australian bank account each month.

My understanding is that the total interest earned on the Channel Islands account needs to be declared as income.
What else would need to be declared? I guess the £500.00 paid into my Australian account each month, but what about the rest of the money accumulating in the offshore account?

Hope someone can help with this one (Alan?)
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Old Oct 9th 2002, 8:37 am
  #2  
UDS
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Default Re: Offshore Banking Question

Originally posted by renth:
Here is a question about tax on income paid into an offshore account.

I receive £1,000.00 a month from renting out a property in the UK. That money is paid into an account in the Channel Islands to get the best possible interest.

I wire £500.00 to my Australian bank account each month.

My understanding is that the total interest earned on the Channel Islands account needs to be declared as income.
What else would need to be declared? I guess the £500.00 paid into my Australian account each month, but what about the rest of the money accumulating in the offshore account?

Hope someone can help with this one (Alan?)
Someone with better information than me may correct me, but as far as I know . . .

Assuming you are resident in Australia for tax purposes, the rent on the UK property (or property anywhere else in the world) is assessable income, subject to Australian income tax. You can make the usual deductions in calculating your net income – estate agent’s fees (if any), interest on a loan taken out to buy or improve the property, that kind of thing. The net income is taxable in Australia, and you will get a credit for any UK tax paid on the same income. The position is the same whether you remit all, some or none of the income to Australia.

The interest income in Jersey is also taxable, as you have already spotted. Again, it is taxable whether you remit all, some or none of it to Australia. I presume there is no Jersey tax, so the question of a tax credit doesn’t arise.
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Old Oct 9th 2002, 10:24 am
  #3  
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Default Re: Offshore Banking Question

Yep, can't argue with that ...

Best regards.


Originally posted by UDS:


Someone with better information than me may correct me, but as far as I know . . .

Assuming you are resident in Australia for tax purposes, the rent on the UK property (or property anywhere else in the world) is assessable income, subject to Australian income tax. You can make the usual deductions in calculating your net income – estate agent’s fees (if any), interest on a loan taken out to buy or improve the property, that kind of thing. The net income is taxable in Australia, and you will get a credit for any UK tax paid on the same income. The position is the same whether you remit all, some or none of the income to Australia.

The interest income in Jersey is also taxable, as you have already spotted. Again, it is taxable whether you remit all, some or none of it to Australia. I presume there is no Jersey tax, so the question of a tax credit doesn’t arise.
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Old Oct 9th 2002, 3:05 pm
  #4  
Rob
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Default Re: Offshore Banking Question

In renth wrote:
    > Here is a question about tax on income paid into an offshore account.
    > I receive £1,000.00 a month from renting out a property in the UK.
    > That money is paid into an account in the Channel Islands to get the
    > best possible interest.

What rate are you getting ?

Channel Island rates aren't usually anywhere near
as competitive as Internet accounts in mainland UK
banks.

They'll pay interest gross, but you've still got to
declare it, so there's little to be gained.
 
Old Oct 9th 2002, 4:34 pm
  #5  
Don
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Default Re: Offshore Banking Question

Originally posted by Rob:
In renth wrote:
    > Here is a question about tax on income paid into an offshore account.
    > I receive £1,000.00 a month from renting out a property in the UK.
    > That money is paid into an account in the Channel Islands to get the
    > best possible interest.

What rate are you getting ?

Channel Island rates aren't usually anywhere near
as competitive as Internet accounts in mainland UK
banks.

They'll pay interest gross, but you've still got to
declare it, so there's little to be gained.
True. Better to go internet deposit UK in many circs and register for gross interest if you are non-resident
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Old Oct 9th 2002, 8:57 pm
  #6  
Jaj
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Default Re: Offshore Banking Question

Many UK banks no longer accept non-resident declarations for gross
interest. They use it as an excuse to push you towards their Channel
Islands / IOM branches, where rates are lower.

It's not such a big deal because you can always reclaim or offset any
tax deducted anyway, afaik.

Jeremy

    >On Wed, 09 Oct 2002 16:34:02 +0000, pleasancefamily wrote:
    >Originally posted by Rob:
    >> In renth wrote:
    >> > Here is a question about tax on income paid into an offshore
    >> > account.
    >> > I receive £1,000.00 a month from renting out a property in the UK.
    >> > That money is paid into an account in the Channel Islands to get the
    >> > best possible interest.
    >> What rate are you getting ?
    >> Channel Island rates aren't usually anywhere near
    >> as competitive as Internet accounts in mainland UK
    >> banks.
    >> They'll pay interest gross, but you've still got to
    >> declare it, so there's little to be gained.
    >True. Better to go internet deposit UK in many circs and register for
    >gross interest if you are non-resident
    >--
    >Posted via http://britishexpats.com
 

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