Overseas bank accounts

[fairline]

I am expecting to dispose of a substantial asset which will leave me with a large capital sum to invest. The amount of interest from this capital would I assume attract income tax at the highest level (40%). Can I transfer this money to an overseas bank account and reduce the amount of UK income tax while still having access to some of the money?

[dzug]

No.

You are still liable to UK income tax on the interest from the overseas bank account. If you are taxed overseas there can be some allowance for this if the UK has a Double Taxation Agreement with the country concerned. At best you will pay the same overall tax, at worst you will pay twice.

[WendyS]

dzug is correct. If you are resident in the UK you will still be liable to income tax on the interest earned in any overseas bank account. If you have read the financial press recently you will see that the Inland Revenue (or whatever they are calling themselves now) are stepping up pressure on overseas banks to disclose information on the accounts of any UK investors because of the huge amount of tax evasion which has been happening.

[khana]

Under the European Tax Savings directive implemented last year all the UK and European offshore Banks must offer their customers the choice of either a witholding tax of 15% on the gross interest received (increasing over time) or full disclosure of the interest earned to their country of rescidence.
This was put in place to stop people placing money offshore or in different countries and forgetting to disclose the interest earned.
In effect you are taxed, from a little as 15% to the maximum uk tax rate of 40%. Eventually of course the intention is to head towards full disclosure with no other options.

[fairline]

Thanks guys. I heard you could get numbered Austrian anonimous bank accounts with something in the order of 15% tax on interest and that daily transfers of no more than 20,000 euros do not regiter on the Inland Revenue radar. Is this not the case? Having already paid tax when I recieve the capital then I want to do what I can to minimise future tax. Would it be best to consider moving to a tax haven for a while?