Halifax International provides offshore banking to expatriates

With 400,000 people moving out of the UK in 2006*, up from 259,000 a year earlier, it is clear that the trend amongst Britons to move abroad is becoming more and more popular. The most common reason for leaving is work related and covers almost half of all those emigrating. This makes for a large section of the British working community upping sticks for foreign soil.

Almost a third of all emigrants (32%) went to live in Australia or New Zealand and almost a quarter (24%) went to live in EU countries, in particular Spain or France. In a continuing pattern over recent years, over half of long-term emigrants (207,000) were British. The remainder (196,000) were non-British citizens, who left the UK in 2006, and had lived in the UK for at least a year.

This sounds, and often is, an idyllic situation. Imagine no more squashed tubes, cancelled trains, traffic jams and dreary British weather.

With globalisation becoming more and more apparent in all our lives, people are finding that there is more demand for them to live and work abroad. There are many aspects of life which can be daunting and confusing and people will have to adjust. Personal finance is one area you will want to be sure about without exception. And that is why many people opt for offshore banking.

Mistaken perceptions

One of the biggest misconceptions in the UK is that unless you are emigrating, you will not be able to take advantage of offshore banking. Another is that offshore banking products are only for the rich.

Offshore banking is regularly seen as the preserve of the super rich and not for “ordinary people”. This is mainly because financial planning is misunderstood and financial planners are often mistrusted. Also, there is a surprising sense of vulnerability amongst many expatriates who have made the break with the UK and set up a permanent home in the sun. This can result in essential financial planning being overlooked.

Another misconception is that customers will be able to manage their finances at home and abroad by combining an account based in their home country with a local account in the country they are going to live in. This is entirely adequate if you are planning on spending a long amount of time in one location, but is not entirely practical for those frequently moving across borders. The lack of international reach is one of the problems when banking this way and people who spend time in many different countries would be better off with a recognised bank that provides an international service, thus saving a lot of unnecessary time and effort.

Choosing an offshore bank with a familiar name is a good and popular idea, because many people feel more comfortable with a trusted name. There is also the piece of mind you will receive, knowing you will be able to speak to someone in the same language. Many working in offshore bank locations, such as Jersey, are expatriates themselves and therefore have experience of offshore banking and can understand your needs and requirements.

By choosing an offshore bank account with a household name you know and trust you can ease your apprehension a little. As long as you choose your bank carefully, examine what they can offer and assess whether or not it suits your lifestyle, you should be able to concentrate on enjoying your life in a new and exotic country.

For expatriates, being able to talk to someone they trust and understand is really important. Knowing that colleagues are properly trained and are able to deal with your daily banking requirements means a lot to customers and allows them to get on with their lives.

Knowing your tax status

One of the most important aspects of offshore banking is sorting out your tax status to help you to minimise your UK and overseas tax liabilities.

When looking at your tax status, it is important to seek qualified, independent legal and tax advice. However, the important thing to remember is that you should inform the relevant HMRC departments when you leave the UK and then when you return again. In addition, you should also notify the tax authorities in the country that you will be arriving in of your plans and intentions during your stay.

Further information about the rules regarding your tax status can be found in HMRC’s guidance leaflet IR20, Residents and non-residents, Liability to tax in the UK.

Offshore Savings Accounts

Halifax International provides simple offshore savings accounts, available in Sterling, Euros or US Dollars, to British expatriates who are resident abroad through internet and telephone banking services.
Offering a fixed rate of 4% after one year, the Regular Saver is available in Sterling and enables customers to save between £100 and £2,000 per month.

The Fixed Rate Web Saver account means that expatriates receive different rates for different savings terms across six months, one year, two years and three years periods.

The Variable Rate Web Saver account, available in Sterling (offering up to £1.40%), US Dollars (up to $0.90%) and Euros (up to €1.45), provides expatriates with a great product for their everyday saving requirements.

* Office of National Statistics 2007.

James Gairdner
Product and Marketing Director
Halifax International