Adnams

Does anyone have experience of still maintaining off-shore bank accounts even while in the US?

OH and I used to maintain an off shore account in the Isle of Man when we were out in Asia, we were using this just like a current account as the banks in Indonesia were notoriously dodgey and were paid in sterling from a UK employer.

We know that we can have a US dollar account with Lloyds TSB on the Isle of Man and as interest rates are favourable we were thinking of re-opening one and basing what little savings we have there.

However, does anyone know if there are tax implications in the US for this and also has anyone found the electronic transfer costs to be prohibitive?

Many thanks in advance for advice / experiences

Englishmum

We opened a LloydsTSB offshore account in the IoM when we moved to Singapore and we still have it (as we have a house in England and we're always sending money to our daughter in London). We have the usual Visa/Debit/cheque guarantee card and cheque book and it operates exactly like a UK mainland account.

To transfer money into the account (pounds sterling) we're using http://www.xetrade.com. Do a search on this website for xetrade, many of us on BE use them as you get the best exchange rates and you don't pay the huge transfer fees that the US banks are typically charging.

Everyone's tax situation is different so I can't advise on that.

Just wondering why you would want a US $ offshore account if you're living here instead of a Pounds Sterling account......surely you have a US mainland current/checking account? When I go to England I just go to the usual cashpoints to withdraw cash, I would think that if I had an offshore US$ account then I'd be having to pay extra fees for the currency exchange transactions?

Adnams

Its just that the interest rates are favourable to what we're getting here. We would use the off shore US dollar account just for savings and still have all our current / checking accounts here with local banks. But I was kind of sceptical it would be worth it in the end as the t.t. rates will be high - like you said. Will check out your link though for sending sterling prezzies to all my various nieces and nephews, we would be t.t. our savings in dollars.
We always found Lloyds tsb to be a very good bank for us in the past but that was for sterling accounts.

Elvira

Don't you have a normal UK bank account as well? I've always found UK rates better than offshare rates.

Using XE Trade for transfers - very quick and best rates.

The IRS will tax you wherever you keep your stash...

farmerwife

Just got one of these last week when I was in UK. Went into a local Lloyd's branch, tried to open a regular checking account (impossible for me). But got an appointment with the roving international specialist a couple days later. The sterling account is 7.50 pounds a month, also can have a $ or Euro account included for the same price. It would probably be easier to open one while you are in the UK, as they have to verify your passport, also I had to provide my last 3 months bank statements.
As far as the IRS is concerned, you'd have to declare your worldwide income no matter what country it is derived from anyway?

Bill_S

In the USA you are taxed on your income, no matter where you put the money after you've earned it. There's no legal way to avoid income tax by parking your money offshore. I don't know if that's what you were asking, but "tax implications" is a vague statement. Unless you are talking about a very large amount of money, or a very large interest rate differential, it might not be worth the trouble. I doubt many average American bank customers have offshore accounts, and you might find that your local branch is inexperienced at doing international transfers. My local bank used to make heavy weather of transfers to/from Canada; the manager would have needed CPR if I'd asked about the Isle of Man!

BritGuyTN

what interest rate is the off shore bank giving youout of interest

i did research a while back and it seems that

1. the inland revenue report non-resident for tax purposes to the IRS

2. The IRS beat up all the off shore banks, so they report your account info to the US taxman

I realised there was no point for me to get a off-shore account

as another poster mentioned, you will be liable for us tax even if the account is not in the usa

Adnams

I know that we already pay the income tax via OH's payslips. I guess we were trying to avoid tax on interest but seeing as its not like a huge mega amount I think the t.t.'s to the Isle of Man will outweigh any benefits it may bring plus didnt realise that the Uk reports to the IRS.
Last time I t.t.'d our local Conencticut bank charged $30 smackers and were a pain in the butt about it.
Oh well it seemed like a good idea at the time over a few glasses of wine at Sunday lunch..... Best laid plans and all that.

Adnams

No we ditched our UK on shore current accounts about 7 years ago. We only have saving there now. In hindsight that was not a practical or sensible thing to do. But nevermind