Given recent media stories such as the “Paradise Papers” investigation, you may have heard about offshore accounts and tax avoidance. Even if you haven’t, you’ve perhaps wondered if it’s possible to get a better rate of return on investments or savings you may have. So in all likelihood, you may have wondered why move money to Jersey, or any of the other offshore options such Guernsey or The Isle of Man.
Two distinct advantages of moving money to Jersey
Whilst the laws about ‘offshoring’ are often changing, It’s generally considered more attractive to bank, save or invest somewhere where your money will work better for you.
Generally, this is down to two aspects – taxation and interest.
Better Interest Rates
In some cases, better interest rates are available offshore, which is why many people move money to Jersey.
Lower (or no) tax
Secondly, it could be more beneficial from a taxation perspective to have your money offshore in Jersey, with a view to paying less – or even none – tax. Simply put, any gains or income held offshore to the United Kingdom are ignored for UK tax purposes.
If you have been a resident of the UK for more than seven of the last nine years, you become of interest to the tax authorities. However, you can choose to continue to pay ‘remittance’ on any money that you send to the UK, and keep the balance tax-free so long as it’s outside of the UK.
Options for investment by moving money to Jersey
Of course, as it’s a popular business to move money to Jersey, there are many different methods for offshoring.
Starting with straightforward savings account, it’s possible to get a higher interest rate on any deposits made into an offshore account.
Although due to tax and other laws changing, and the high street banks offering attractive rates onshore, these rates may not be as high as in past years.
However, by coupling offshore investment with lucrative interest rates into tax beneficial vehicles such as investment funds or bonds, it’s possible to increase your wealth due to better investment planning.
One consideration before moving money to Jersey
As with any financial decision, it’s wise to research the market thoroughly and seek expert independent advice. Tax and investment laws can be complicated, plus one also needs to consider estate planning such as probate.
Financial planning can benefit couples in many different ways, especially with respect to tax, but it’s always worth considering every eventuality – including access to funds and benefits should a spouse die.
So before everyone rushes to send money across the Channel, ensure all aspects of future estate planning is undertaken as well as for the present. Legal advice is always wise, especially in terms of beneficiaries, and trust and investments could have serious implications if sage advice is not sought. Especially is also that Probate in Jersey may also be necessary at a later date.
Conclusion: why move more to Jersey? To make even more money!
In summary, with the correct financial, taxation, legal and estate planning, moving money to Jersey can definitely be beneficial for investments, savings and tax optimisation.
