HSBC Offshore Account Charges-NEW

I know some of us have HSBC offshore accounts as they have the lowest minimum and no account fees-

Well just got communication that as of January 1, 2007 if you do not have a minimum average daily balance of £25,000, that you will be charged £20.00 per month until that minimum is met.

UGH!!!!! 

Can we confirm this?  The website still says £5,000 here: http://www.offshore.hsbc.com/1/2/international/current-accounts/offshore-bank-account?WT.ac=HBIB_2006_10_11_CAM0_OBA3

I can only confirm this based on the client communication I recieved in the mail yesterday direct from HSBC.   I don't have a scanner or else i'd scan it.....

I'm ticked, and thank gosh my husband read it or else i would have just filed it.

PDF on Tarrif Changes per their website:

http://www.offshore.hsbc.com/1/PA_1_3_24P/content/international/pdfs/backup_old/general/2007_PDFs/tariffofcharges_2007.pdf

I can confirm it; I got the same letter and brochure in the mail yesterday.

well i got a strange letter saying to disregard what was sent to me previously....

Phil, did you get that?

No, not yet - I'll let you know if I do.

I was wondering, how do you qualify for offshore accounts?  I understand investing in a lot of funds can draw the wrath of the IRS in the form of high taxes, does an offshore account avoid these problem?

Thanks,
Matt

No - all non-US accounts are "offshore" to the US, but non-UK accounts can save a considerable amount of UK tax.

No - all non-US accounts are "offshore" to the US, but non-UK accounts can save a considerable amount of UK tax.

If that's the case, why doesn't everyone in the UK get offshore accounts?  Is there a catch?  Are they difficult to get or have fees or high, upfront deposit requirements?

The majority of folks in the UK are domiciled in England & Wales, Scotland or Northern Ireland. If you are domiciled in one of these countries (or the Republic of Ireland) an offshore account will not normally save UK tax.

If however - as most readers of this forum are - you are domiciled outside of the UK - say within the United States - you can save paying any UK tax on investment income and may save UK tax on wages, depending on circumstances.

I was looking at an HM Treasury webpage and it says your domicile is based on where your father is from and domiciled.  For many of us it's the US.  It's not necessarily where you were born, ie if your father was on assignment for 2 years in another country and you were born there at that time your domicile would be where your father is normally from.

This treasury page said that you would have to legally change your domicile by providing strong evidence and that simply living somewhere for a long time was not proof enough.  It seems to me that it is nearly impossible to change your domicile status.  I suppose that's useful for us if we wish to do these offshore investments while we're in the UK!

It is quite easy to change domicile by deciding to stay here for ever even if you lose your job, your partner dies, or your mom back home gets ill; plus and telling all of your friends and family that this is your choice (it does happen, say you have kids who were born here and are now at secondary school here and so you expect to stay to watch yoour family grow, whatever happens).

However all recent case law demonstrates that changes from a domicile of origin to a domicile of choice are in practice very very difficult if one retains connections in one's previous domicile.

There is however a common misunderstanding in Matt's post in that no-one is domiciled in 'the US'.  You are domiciled in a State within the US.

To get the favourable UK tax position you need to claim both to be non-UK domiciled and to be taxable on the remittance basis.

This usually needs some advice because the Revenue's forms are designed to confuse.

Both my husband and I have dual citizenship (US and EU). He just started his job in August and is on the PAYE arrangement. The tax bracket he is in the higher than we were used to in US. Can he claim domicile in US even though he is also a citizen in EU?

As you are both US citizens you are taxable in the US on worldwide income.

You are each domiciled in the country where your fathers were domiciled when you were born (eg Belgium/Taiwan).  As these were not the UK then you are not UK domiciled.

You can almost certainly save UK and US taxes by planning around residence and domicile. Its best to the planning now if you can before you settle down to a lifestyle where you might end up paying more tax than you needed to.  If you want to send me a PM I'd be glad to assist.