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UK Freephone: 0808 160 0670 | EIRE Freephone: 1800 932 514
Important Changes to Offshore Savings
Important Changes to Offshore Savings
Under the European Savings Directive (ESD), retention tax - also known as withholding tax - has recently seen a rise of 5% increasing to the rate of 20%. Effective from 1st July 2008, the latest increase is a further blow to European Union (EU) residents with savings in offshore destinations such the Isle of Man, Guernsey and Jersey.
Introduced as part of the EU Tax Package in 2005, the ESD's main aim is to counter tax evasion within the EU. The ESD allows EU banks, financial entities and tax authorities to share information about customers who earn savings interest in an EU state but live in another. Included within the ESD directive are UK Crown Dependencies (Guernsey, Jersey and Isle of Man) and UK Overseas Dependencies such as the Cayman Islands and the British Virgin Islands.
The ESD retention tax can be avoided if you choose the 'reporting option' or if you can prove that you are exempt from this tax. The reporting option means that the bank holding your savings supplies details to the tax authorities in your country of residence, for example, HM Revenue & Customs in the UK. These details include the amount of interest your savings have earned and personal information such as your name and address.
Although the reporting option means you save on retention tax, the information supplied by the bank holding your savings could be contrasted with tax returns you file with your tax authorities. Exemption from retention tax is also possible, although this is usually only an option for those who are non-taxpayers in their country of residence.
The recent rise in retention tax means offshore savings are no longer as attractive as they once were. Given that a further rise in retention tax is due as from 1st July 2011 when the tax will go up to a massive 35%, it may be worth starting to consider alternatives to offshore savings.
About Obelisk Finance
Obelisk Private Finance's expertise lies in its international approach to financing, recommending products both the country of residence and overseas. This ensures the most profitable option is chosen whilst guiding each client through the entire mortgage and legal process and advising on the various tax implications.
If you would like to know more about what Obelisk Private Finance can do for you and your Romania property investment, please do not hesitate to contact the Finance team on
Phone: (0034) 952 820 319
FREE from the UK - Phone: 0808 160 0670
FREE from Ireland - Phone: 1800 932 514
Website: www.obeliskfinance.eu
Email: info@obeliskfinance.eu
For press enquires, please contact Obelisk's marketing department on (+34) 952 820 319 or email press@obeliskinternational.com
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