The headquarter of Hong Kong and Shanghai Bank

Think about the ease of access to your account, bearing in mind different time zones, and whether you can pay all of your bills through this account in Euros or another local currency.

There are many questions that will go through your mind when you are considering your Banking, such as the Banking laws in your new country of residence, how much you trust them and whether you think a new bank account is really necessary.

You need to select a bank that has a presence locally in many nations around the world but which also has a strong global reputation and represents the highest international standards in Banking. 

You can then have an offshore bank account which you can tailor to suit your requirements in terms of being able to access funds internationally, do international transfers and transactions easily, get money out of the wall anywhere without having to pay charges – and better still, you can build up your own Banking history with such an international Banking group and you can take that history anywhere with you if you decide to move on or move back home.

Opening an account is easily done, either on high street or online with one of the big name banks or building societies. Many of the accounts are held with offshore subsidiaries in the Channel Islands, Isle of Man or Ireland, and most will ask you for at least £5,000 minimum deposit.

Multi-currency accounts

In some cases accounts can be operated in more than one currency, allowing you to deposit your cash in sterling, dollars or euros and draw on it in a range of currencies, too.

The main drawback is that you don’t have the same consumer protection as you do with UK-based accounts.

While most offshore accounts are offered by the subsidiaries of reputable UK entities operating in parts of the world with their own regulatory systems, such as the Channel Islands, the Isle of Man and Gibraltar, if things go wrong you will have no one within the UK to complain to, and you won’t be able to get compensation from the Financial Services Compensation Scheme.

Savers should be extremely wary of placing their cash in overseas jurisdictions with which the UK traditionally does not have Banking links, unless they are taking specialist advice.

UK residents can also take advantage of investing overseas in special funds.

Distribution Funds

These funds, also known as “qualifying” funds, must distribute at least 85 per cent of their income to investors. Distributions are paid gross and UK taxpayers have to declare the income received in their annual tax return.

As with offshore savings accounts, because the income is received gross it is possible to pay the tax at a much later date in the annual tax cycle, helping the individual’s cashflow.

There can also be capital gains tax advantages, including the possibility of offsetting the individual’s annual CGT allowance against gains.

Accumulation funds

These are also known as “non-qualifying”, or “roll-up” funds. They pay out no income – so the individual pays no tax on them during the period of the holding – but plough investment gains back into the fund. When the investor withdraws from the fund, gains are fully taxable at the holder’s highest rate and are subject to special “offshore income gain” rules, which do not allow gains be offset by the investor’s onshore CGT allowance. However, the funds can once again be useful for deferring a tax liability, perhaps for several years - until after retirement, for instance, when the investor is paying tax at a lower marginal rate.

More adventurous investing

The UK investment industry is closely regulated, to protect investors from unscrupulous operators. This means that sometimes the range of funds available appears limited, tempting more adventurous investors to look at overseas investment companies. Investing outside the remit of the UK regulator is really only suitable for experienced and sophisticated investors, who realise fully what they are doing.

Anyone investing with an overseas firm should be sure they know the identity of the relevant regulatory body and what their rights are if something goes amiss. Levels of regulation, supervision and Compensation schemes vary enormously. The FSA “recognises” some funds, which, although they are managed overseas, are permitted to be marketed within Britain, because the UK regulator is satisfied with the level of regulation within the overseas jurisdiction. However, if something goes awry you will still not be able to claim from the UK compensation scheme.

You should particularly take care if you find an apparently good offer advertised on the internet. You can find out from the FSA Register http://www.fsa.gov.uk/register/ if a firm or individual is authorised in the United Kingdom, and also check the regulator’s website for warnings about certain firms that are known to have caused problems.

Some of the questions to ask yourself when deciding whether to open an offshore bank account:

• How easy is it to open a bank account that is tailored for my situation?

• How can I get immediate access to my cash across the world?

• Does my local bank understand the issues that face me now? For example, how to move money across the world?

• Is my money secure? Is it safe from political or economic problems that could decrease the value of currency?

• Where do I get reliable independent advice on how to maximise returns on my money?

• Am I minimising the amount of tax I pay on savings and investments?

• How do I find out about the tax system in a new country?

• What financial advantages can I benefit from now that I'm living or working abroad?

• Does my bank have language or cultural problems in helping me?

• Do I have round the clock access in the currency of my choice?

• Do I have to open a new bank account with all the subsequent admin problems every time I move?

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