The increase in global business and travel means more and more people are moving around for business, and indeed pleasure purposes. Regardless of why you are traveling, money is an essential item for your trip so you should investigate international banking options before jetting off.
An international bank is similar to a bank found in the United Kingdom in terms of the services offered. Payment accounts, debit cards and lending opportunities are all part of international banking. Personal and corporate accounts are generally available when banking internationally so both individuals and companies can benefit.
There are an abundance of reasons why individuals and companies opt to bank internationally with tax rules generally ranking high on the list. The tax rules that govern offshore accounts differ from those of bank accounts within the United Kingdom.
Interest accrued on an offshore savings account is paid gross without income tax being deducted. Interest paid on the gross amount amounts to more, thereby producing a more sizeable final payout.
Many people around the world use international banks to shelter their money from their home country’s income taxes but you must remember to sort out the finer details to ensure you are avoiding, not evading, tax.
Remember that if you are liable to pay tax in another country then it is your responsibility to declare the interest to the relevant authorities. If you live and work in the UK and bank offshore, the interest earned from money held in your offshore account is classed as taxable income and must be declared on the self-assessment tax returns which are completed at the end of each tax year.
If you live and work outside of the UK you should seek local tax advice to see if you need to pay any tax in your country of residence.
There are many other benefits offered by banking outside of Britain. Some foreign banks might offer better interest rates than domestic banks, providing an easy money-making opportunity for customers.
From a business point of view, international banks make it easier to operate globally as one bank can be used for all accounts, as opposed to using a different bank in each country business is conducted within.
In addition, international banks offer many financial services that help facilitate worldwide trade. Payroll and credit lending services are a few of the most used. Some international banks also offer financing services to support businesses facing the challenging costs of importing and exporting products
Regardless of whether you are a personal or corporate customer, opening an international bank account could prove useful when considering domestic interest rate fluctuations. International banks lend and borrow on international markets therefore are less affected by domestic interest rate fluctuations which is good news for everyone.