It's just a year since the EU Savings Tax Directive swung into action, and
IOM-based Derbyshire Offshore says it doesn't seem to have been the disaster
for the world of offshore that many predicted.
Introducing a new, higher rate on Derbyshire's Interest Accumulator account,
Fiona Passey, Director of Offshore Banking says, 'Whilst the overall impact
of the new Directive continues to be far less than expected, this new account
gives customers a valuable tax planning option as the interest and tax are deferred
for a minimum of two years and then only paid at the customer's request."
The European Savings Tax Directive was introduced a year ago, with the aim
of clarifying the position of the taxation of offshore deposit accounts for
EU residents. For offshore financial centres such as the Isle of Man, a withholding
tax option was introduced for those customers who wanted to preserve the confidentiality
of their banking affairs. The impact of the Directive to date for offshore banks
and building societies in the Channel Islands and Isle of Man has been limited,
suggesting that the vast majority of clients were already passing information
on interest earned to their professional advisers or the taxation authorities.
The Directive has undoubtedly added a significant layer of bureaucracy to offshore
investing, but the core benefit in holding an offshore account, namely the ability
to use gross payment of interest for tax planning, still remains.
Fiona Passey continues, “From our ongoing research with customers, it’s
clear that the longer term impact of the EU Savings Tax Directive will be upon
people’s choice of retirement destination. Whilst cheap air fares to the
UK have made France, Italy and Spain highly popular destinations for UK retirees,
the taxation regime may become a decisive factor for those looking to make their
savings last long into retirement.”
With the numbers of UK citizens expecting to emigrate abroad for work or retirement
continuing to rise, the variable rate Interest Accumulator savings account from
Derbyshire Offshore offers those planning to leave the UK with another financial
option.
Fiona Passey adds, “Our Interest Accumulator account was designed for
those clients who are expecting changes to their UK taxation obligations at
a future date. It offers clients control over the date at which interest is
payable and therefore when any tax liability becomes due. “
The account offers four tiers and variable interest rates up to 4.70% Gross/AER.
Interest is calculated and accrued daily, but is only paid on the day an account
is closed, which can be anytime after two years of opening the account.
Derbyshire Offshore is the trading name of The Derbyshire (Isle of Man) Limited,
a wholly owned subsidiary of Derbyshire Building Society, one of the UK’s
top ten societies.
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