Tax dodge of the week: offshore accounts for expats

published 27 June 2007

Many people dream of working overseas, but you should seek financial advice "before boarding the plane", says Emma Simon in The Sunday Telegraph. Aside from the obvious concerns working out whether you can afford your current lifestyle where you're going you should be aware of the tax implications. Although the Revenue won't be taking its cut from your monthly salary while you're abroad, you won't "escape HMRC's clutches completely". Income derived from British assets, such as property, savings accounts and shares is still taxable.

The good news is that all British citizens retain their personal allowance, currently £5,225. Normally this is applied to your salary, but expats can use it for rental income and bank interest. If, like most people, you plan to rent out your home, you should register under the non-resident landlord scheme so that you receive the rental income gross. As for your savings, you can either apply to have all bank interest paid gross as well or, if you are already likely to exceed the £5,225 threshold, move your accounts offshore. While you are classed as non-resident, they will be out of reach of the UK taxman.