sabato

Hi Everyone,
It’s drizzling here in sunny Sardinia, so would like to ask a question about my offshore saving account.
Background:
I rec’d a letter from Nationwide Building society in IoM to advise me that a change in IoM law from 1/7/2011 will affect my saving account as they are withdrawing the retention tax option and will send an exchange of information to my country of residence. (Italy)
Questions:
My only source of income is in the UK and I am taxed on it.
If the building soc sends details to the Italian tax authorities, what will they do?
I want my tax to be paid in the UK as it will be simpler for me, how can I achieve that?

Thank you very much for your help and advice.

TestaRossa

I don't think it will make any difference. The law changed so that all the banks that were able to keep account details secret in places like IoM, Jersey etc. weren't anymore and had to be as open as the banks on mainland UK...so all it should mean is that your account is treated the same as anyone on here with an account on the mainland...I could be wrong, but don't worry about it I would say.

37100

Can't help you here, but this would worry me too. Not so much the off-shore account notification, but that you pay tax in the UK and are resident here. I wouldn't want the tax office snooping around my accounts unless you have a valid reason for not paying tax here. There are some competent members on here and I sure they will chip in on Monday.

TestaRossa

It should fall under the dual taxation thing though shouldn't it?? Or are you more worried about the residency status of the OP? They will be in the same situation as anyone else who draws money from the UK while living here now, so I guess someone who does this would be the best person to answer!

37100

It could fall under dual taxation, but the OP just said she wanted her tax paid in the UK because it was simpler. Understandable. Others draw money from the UK, but here Nationwide will be notifying the tax people that you have an account and are resident here. I'm not questioning the OP's tax situation, just saying that the possibility having the tax office going through my accounts would worry me. Wouldn't it you? And I also said that there are competent people on here that can help and not just throw in their two pence worth you. Not referring to you, of course.

TestaRossa

No I know you don't mean me. It was more that my understanding was that it meant that the bank "could" give information when/if asked for it by the authorities here like they can with everyone that lives here and banks in mainland UK not that they will arbitrarily contact them and give them all the info. The law as I understood it was to take away the privilege offshore accounts had where they could hide behind a wall of secrecy built by the banks in places like IoM etc. but I didn't understand it to mean that they will automatically be contacting the tax man here. Like you say, clarification would be good. If I were the OP I'd probably contact the Nationwide tbh and ask them!!

sabato

Thanks for your replies.
I have contacted Nationwide and they said they would send the tax details to my place of residency.
These accounts are in sterling, so it becomes so messy if the Italian tax people try and take the tax in euros. And if I don't pay Italian tax why would they tax me?
Sorry, but I don't understand the process as you can see.

I hope someone can help me. As I won't be the only person this will apply to.

37100

My thought and only my thoughts. I doubt that it matters to the Italian tax man what currency you accounts are in. UK rules differ from Italian rules and if you are resident here for more than 183 dys a yr the Italian tax man expects you to pay taxes here unless you have a valid reason not to and there are some. You can't chose where to pay your taxes on the basis of convenience. The double taxation rule only applies to taxes due elsewhere and here in which case you will only be asked for any difference due. Are you resident here? If so, you need to find a competent accountant. Sorry I can't help you.

zambon

For a start - try talk to the UK tax office (Inland Revenue). They have a helpline and I have found them to be very helpful. They will advise you on where you should be paying your tax. It may well be that if you are resident in Italy you shouldn't be paying any tax in the UK but paying it all in Italy instead. It will also depend on whether your income is from working or from investments / property. If working, if none of the work is actually done in the UK then you probably shouldn't be paying tax on it there but declaring it here in Italy anyway.

giodafa

[QUOTE=sabato;9189321]Hi Everyone,
It’s drizzling here in sunny Sardinia, so would like to ask a question about my offshore saving account.
Background:
I rec’d a letter from Nationwide Building society in IoM to advise me that a change in IoM law from 1/7/2011 will affect my saving account as they are withdrawing the retention tax option and will send an exchange of information to my country of residence. (Italy)
Questions:
My only source of income is in the UK and I am taxed on it.
If the building soc sends details to the Italian tax authorities, what will they do?
I want my tax to be paid in the UK as it will be simpler for me, how can I achieve that?
I could be wrong, but unless you're rich and famous you pay the tax on your income in the country you're resident in. Good luck

sabato

Ahh!
Resident in Italy but don't work Only get a personal pension which is taxed in the UK. My saving accounts get taxed in the UK. Until now, IoM are going to advise the Italian tax people.
Thanks for your help, will do as you suggest, thought I may get an answer on this forum.

37100

Tax is so complex anywhere. I don't think anyone fully understand the rules. Even the tax man himself.

modicasa

It doesnt matter whether you work or not in Italy. You are deemed to have an income because you have a house here and should fill in an income tax return. You are resident here and therefore all your tax affairs fall under Italian law, even on your worldwide income - though you are in a position that lots of Italians are in, which is have money dont want to pay Italian tax. So your choices are to sit and wait for the next scudo fiscale and pay 5% tax instead of 50 due to the govt or bring it in in bits via bancomats (whcih Nationwide now charge for). Obviously having money in the IOM is not like having it stashed in Panama, but the IOM and Jersey are on the 'naughty boys' list and are therefore subject to controls and checks that a simple UK account wouldnt have.
Whether you bring your money into Italy via the UK and pay UK tax or via Italy and pay Italian tax doesnt really matter - what you shouldnt do is try and bring it straight in from an offshore account, or they will find you out. Any money hitting your account in lumps over 5000 euros is now notifiable.