The UK is not a very advantageous location for those interested in tax limitation, although it does compare favourably with most pre-enlargement EU countries other than Ireland and Luxembourg. If you are resident in the UK (that is if you live there for more than 182 days per tax year, have spent more than 91 days there per tax year over 4 years, or make prolonged and habitual visits to the country), you are liable to pay income tax.

Non-residence has traditionally been assumed when you have spent 1 complete tax year overseas, during which your return visits total less than 92 days (excluding days of travel). However, in March, 2009, HM Revenue & Customs published a new 400-page guide to questions of residence and domiciliation introducing changes to its practice as regards day counting and the remittance basis of taxation (including the GBP30,000 charge and personal allowances for those claiming the remittance basis).

According to HMRC, the new provisions make a series of changes to the rules, namely:

As a non-resident, you are liable to tax on certain types of UK source income and gains, for example: UK property, any trade or profession which has a UK based branch, and employment duties performed in the UK. You are not, however, liable to tax on the interest from certain government securities, or interest from UK-situate bank and building society deposits.

The Isle of Man, with 36 banking operations established, is a prime location for UK expatriates and foreign nationals wishing to bank offshore. The industry on the island is dominated by branches or subsidiaries of the main UK clearing banks, although there are also some foreign banks. Banking services provided range from deposit taking to establishing and administering trusts, managing the underlying companies and assets held by those trusts, and investment management. Banks on the Isle of Man are supervised by the Financial Services Commission (FSC).

The Banking Act recognises the contractual duty of a banker to keep the affairs of his customer confidential and the customers' entitlement to confidentiality, other than where disclosure is required to assist criminal proceedings or to enable the FSC to discharge its statutory functions.

All banking licence holders are required to participate in the Depositors Compensation Scheme. The FSC is the Scheme Manager. Initially deposits were protected up to 75% of the first £20,000 per depositor (or foreign currency equivqlent). But in 2008, then Treasury Minister Allan Bell announced that the limit of protection for deposits of individuals would be rasied to a maximum of 100% of GBP50,000.

A number of Manx banks offer a range of current and deposit accounts designed especially for non-residents and expatriates. There are no rules to prevent UK nationals from opening an account in the Isle of Man, whether UK resident or not. Accounts are available in a number of currencies, and interest rates are comparable with or slightly above those offered onshore. There are also several banks offering Internet on-line banking services from the Isle of Man

By concession, deposit interest from Manx banks payable to non-residents (of Man) is exempt from income tax. Isle of Man residents would pay income tax, however.

As from July, 2005, the Isle of Man applies a withholding tax of 15% (increased to 20% in 2008) to the returns on savings paid to citizens of EU Member States, under the EU Savings Tax Directive.

As of September 2010, there were more than 40 licensed banking institutions in Guernsey. Total deposits held with Guernsey banks at the end of December 2008 increased in sterling terms by GBP20.8bn from the end of September 2008 level of GBP136.3bn to reach a new highest figure of GBP157.1bn, representing a 15.3% increase over the quarter and 31.9% over the year. Total assets and liabilities increased by GBP27bn over the quarter representing a 17.8% increase to reach the highest level yet at GBP179.2bn. This represents a 35.9% increase over the year. At the end of the first quarter of 2010, the total level of Guernsey bank deposits was GBP118.7bn.

Guernsey's banks are regulated by the Financial Services Commission (FSC). The FSC is extremely careful to exclude doubtful operations, and has capital adequacy rules which are stiffer than the Basle requirements.

A number of Guernsey banks offer a range of current and deposit accounts designed especially for non-residents and expatriates. There are no rules to prevent UK nationals from opening an account in Guernsey, whether UK-resident or not. Accounts are available in a number of currencies, and interest rates are comparable with or slightly above those offered onshore.

By concession, deposit interest from Guernsey banks payable to non-residents (of Guernsey) is exempt from income tax. Guernsey residents would pay income tax, however.

As from July, 2005, Guernsey applies a withholding tax of 15% (increased to 20% in 2008) to the returns on savings paid to citizens of EU Member States, under the EU Savings Tax Directive. In July 2010, Chief Minister, Lyndon Trott, announced that Guernsey would begin the automatic exchange of information of information relating to interest income earned by EU-resident individuals to their home authorities no later than July 1, 2011.

Statistics released by the JFSC in April 2010 showed that over the previous nine years, total bank deposits held in Jersey have increased by more than GBP50bn, achieving a peak in 2007, and declining thereafter. The number of bank licences has declined by 26, mainly due to mergers. At the end of September 2009, there were 47 banks in Jersey, holding deposits of GBP170.6bn. These included subsidiaries or branches of the top banks from the US, the UK, Switzerland, Canada, Germany, Ireland, Israel, the Netherlands and Spain.

Banks are regulated by the Financial Services Commission, and capital adequacy rules are tighter than those under the Basle Convention.

Many Jersey banks offer a range of current and deposit accounts designed especially for non-residents and expatriates. There are no rules to prevent UK nationals from opening an account in Jersey, whether UK-resident or not. Accounts are available in a number of currencies, and interest rates are comparable with those offered onshore.

By concession, deposit interest from Jersey banks payable to non-residents (of Jersey) is exempt from income tax. Jersey residents would pay income tax, however.

As from July, 2005, Jersey applies a withholding tax of 15% (increased to 20% in 2008) to the returns on savings paid to citizens of EU Member States, under the EU Savings Tax Directive.

There were 26 banks in Gibraltar in 1996, but in early 2010, the number had fallen to 18. The banking sector is well established in both the offshore and local market, with assets in the vicinity of G£8.4 billion.

Most of the banks established in Gibraltar are branches of major UK, European or US banks. Much of the banking activity in Gibraltar is directed to asset management for high-net-worth individuals, not least because Gibraltar has tried hard to attract such people with special tax regimes. See Personal Taxation for details of these schemes.

Financial services in Gibraltar are regulated by the Financial Services Commission. The Commission introduced important changes to the way it supervises locally incorporated banks and non-EEA branches in 2002.

As regards financial services regulations, Gibraltar aims to match UK standards. An example of this is the local money laundering legislation which implemented the EU Directive and was extended as in the UK to encompass all crimes. Accordingly, all banking supervision regulations are the same as those in the UK and procedures for opening an account are much the same.

The identity of bank account holders in Gibraltar is confidential and is only disclosed by the bank if they are ordered to do so by the Courts when investigating serious criminal activity.

Some Gibraltar banks offer a range of current and deposit accounts designed especially for non-residents and expatriates. Accounts are available in a number of currencies, and interest rates are comparable with those offered onshore.

By concession, deposit interest from Gibraltar banks payable to non-residents (of Gibraltar) is exempt from income tax. Gibraltar residents would pay income tax, however. An individual is considered resident in Gibraltar if he has accommodation there and sets foot on the territory during the tax year.

The provisions of the European Savings Tax Directive are in force in Gibraltar.

The Irish banking sector has grown extremely rapidly over the last few years, with the IFSC (International Financial Services Centre) providing a favourable environment for offshore banking. Ireland offers foreign currency services, global money management, facilities for dealing and trading in securities dominated by foreign currency, and a host of other services. The Central Bank of Ireland regulates the banking industry and ensures that banking operations are consistent with the safety of depositors' funds, prudent banking practices and fair trading in banking.

The International Financial Services Centre created a favourable environment for offshore banking, although there are no specific forms of company or entity designed for ‘offshore’ as such, more a variety of special regimes offering low taxation. However, tax breaks for IFSC companies were abolished by the Irish government after an investigation by the European Union concluded that the scheme constituted state aid, and therefore breached EU competition laws, which attempt to maintain a level playing field across the common market.

As in many countries, residence is consequent on presence in Ireland for more than half of a tax year, or for 280 days in two consecutive years. A non-resident individual pays income tax only on Irish-sourced income, and is liable to capital gains tax only on gains arising in Ireland or remitted to Ireland, unless he is domiciled in Ireland in which case he is liable on all capital gains. By 2003, the IFSC no longer had specific fiscal advantages, but most banks remain there anyway. The centre is host to half of the world's top 50 banks and to half of the top 20 insurance companies. Merrill Lynch, Sumitomo Bank, ABN Amro, Citibank, AIG, JP Morgan (Chase), Commerzbank, BNP and EMRO are just some of the big-name operations that have chosen to locate in the area.

As from July, 2005, Ireland supplies information about the returns on savings paid to citizens of EU Member States, to their home States, under the EU Savings Tax Directive.