Taxman extends to offshore havens
Monday, 4 July 2005 12:00 AM
The Inland Revenue (IR) could recoup about £70 million in taxes as a new EU ruling allows it to extend its reach to offshore bank accounts.
All UK residents are now required to pay tax on any interest that they receive on savings accounts at the same rate they pay income tax - wherever the accounts are held.
As a result, banks in Switzerland, the Channel Islands and the Isle of Man will have to inform the IR of their contents of UK residents' accounts or pay "withholding tax".
However, several countries - including Austria and Luxembourg - have opted out of the agreement. For investments in these countries, a retention tax of 15 per cent, rising to 35 per cent by 2011, is liable.
And many accountants believe the changes will simply force people to move their money further afield, such as to Singapore or Dubai.
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