Chasing Alpha (on a deposit account off shore)

It is now time for the prudent to dig deep and help out the overburdened. People who are heavilly in debt and finding it hard to make ends meet deserve to get a slice of your money. After all if it is just sitting in a bank account then you don’t really need it. It could also be said that our current troubles came upon us due to your saving attitude. If savers had pitched in and got debted up then we could have had numerous more years of exuberence. So cough up this minute and help out the overburdened landlord, the flipper, the specu-investor, the bankers and of course our governent.
Or maybe you’d rather not.
I am in the latter category. I have significant cash which is currently in Rabo Direct and I want the best return I can get for it.
RaboDirect are not particularly good but they are quite safe. All the same I am now thinking of moving the money due to our governments extra unearned 2% dirt tax. The dirt tax is almost 25% now. This means if you are earning 4% interest then the government rob 1%. This leaves you at 3% return. But hey, it’s better than the property returns the Canny McSavy landlords are getting. Although those guys have Cognitive Desinance on their side so they can deny they are loosing money. Many can’t.

Anyway. I know we explored these investment options exhastively but I have a new slant we haven’t explored yet.

I am interested in off shore investing. I want to take my money out from under the fat nose of the government were I can’t be coerced into bailing out the greedy people who caused the mess we are in.

Firstly we can open a savings account with other Euro countries. Many will need a local address however you can pay for a local address in many countries. Your mail will be redirected to your home address. For this you have to consider costs of maintaining this address and mony transfer fees. I believe the EU guarantees a max of 40cents charge for transfering money between EU banks. Many banks charge nothing. So this would be very low cost. So what other problems exist? Some people will have difficulties with the language but these can be overcome as your monthly statement would be easily understood. Terms and conditions could be a challange.

Anybody got info on foreign banks with good savings rates? I’ll check out the Spanish banks. I’ll be over there for the Christmas so I’ll gather all the info then.
Lets start with this though
hipotecasydepositos.com/ (Have to say I’m not impressed with the hairy conditions this lot have on their savings. Once I see this type of shit I usually walk away cause there is only one reason a bank has all these conditions. They want to have a chance at screwing you. Not a good footing for a business relationship.)

It is in Spanish but you CAN understand it if you try. I will translate if there is demand but try reading it first.

Another thing I want to explore is high interest saving accounts in the Isle of Man, Channel Isles etc.
You can open an account with banks in these places and the onus is on you to declare your returns. Since you can make certain capital gains without tax each year then I wonder is it possible to delare interest earned on off shore deposits as capital gains. If not then maybe off shore bond gains. Anyone know?

If revenue have a dual taxation agreement with the other country (and for EU… euro currency in specific… countries, I’d say they do) then I reckon you’d still be dirtied :slight_smile:

Well well well, an invitation to evade tax, i.e. break the law.

The revenue will be interested in this thread.

Where does it say illegally? Let me say it explicitly, non illegal investments.

I just paid 51 cents! I was ripped! 8-

I could be wrong but then again I may not be. You need to go back to that bank and query their charge. Eleven cents is nothing to be sniffed at.

BTW. Spain has DIRT and it is 18%.

On this money transfer thing does it only apply to Euro-Euro? All the UK banks want to charge me huge fees for IBAN transfers, are they wrong?

Yes, I believe they are. I believe it should be essentially free where you quote an IBAN number (like 50-odd cent).

edit: sorry, wrong. It only applies to euro payments:
europebanks.info/ibanguide.htm

It may be worth setting up a euro account and transferring money into it in the UK before transferring it to euro?

Three points BB:

  1. If you open an offshore account you are obliged to inform the Revenue in the tax return for the year in which you opened it. Not informing them is an offence right there. That’s been the case since the 1992 Finance Act.

  2. Most European countries are now signatories to the European Savings Directive which means that their banks are obliged to inform the Irish Revenue of the interest paid and any withholding tax deducted on your foreign account. They will do this without telling you. Some countries are in a transition arrangement right now but even Switzerland and various UK offshore islands are expected to become signatories before much longer.

3)The tax code is unfriendly towards those who earn interest or capital gains on money stashed offshore, but it’s a complex area and you would need professional advice. You could easily end up owing tax on the interest or gains at 40% plus.

Forget declaring interest as capital gains. That’s illegal. One is income, the other is not.

A far greater issue looming than the Revenue looking for its cut, is the prospect that deposit interest rates are set to atrophy in the near future as interest rates are slashed in an effort to reflate Western economies.

As far as I can see, there are only two good (legal) reasons why you would put your cash on deposit in a bank in another Eurozone country.

  1. You think there is a high likelyhood that a large number of banks here will go bust, and you’ll have to wait a long time for the government to actually cough up on the guarantee and give you your money back.

  2. You think Ireland will (be forced to) leave the Eurozone and introduce a new Irish Punt, which will immediatly devalue.

In the first case, you can always go with Northern Rock or Rabo or the likes (which is what I’m doing), which is a lot less complex from an administrative and tax point of view. So if you believe there’s a reasonable chance of us leaving the Eurozone, it’s worth it, otherwise it’s probably not.

On this issue - I am in the process of setting up a fixed term account with Halifax (5.6% fixed, for 1 year).

I was very specific that the funds are for a house purchase in 12 to 18 months from now, and that I didn’t want to be in a situation of potentially waiting months or years for either the British or Irish governments to make good on their word.

He was very clear that in a worst case scenario, there would be no real delay in processing same. Which I struggle to believe, but there it is.

On the subject of foreign banks making offers - was in Poland for a week recently, and there seems to be a huge drive on for people’s savings. Saturation levels almost of TV ads etc.

english.bzwbk.pl/11294

The fabulously named ‘‘get in’’ bank :laughing:

depozyty.getinbank.pl/promocje.html

millenet.pl/internet_banking … t/?lang=EN

We have a Polish address, but I don’t think I’ll bother. Apart from the Revenue issues, there’s the cost of buying zlotys, the forex risk, and the cost plus buggeration factor of travelling over to do it.

But if anyone’s interested, I’ll do my utmost to answer any questions on these products.

Going offshore is not hard - just have no electronic links’ so shoulder the cash around. Easy peasy. Worked offshore and realised I had a load of clients who were scared to access their stashed cash and it wasnt worth it.

Interesting, if Ireland was to leave the Eurozone, how would it work? The people would be forced to have their euros converted to the new punts at whatever rate the gov decides? But what would happen to the original euros? would the gov sell them on forex for the new punts or something? Is there any precident for this?

There’s no precedent for someone getting kicked out of the Euro, but if Ireland got booted out expect An Punt Nua to be worth slightly less than sheets of harsh single ply toilet paper.

Bertie you are not exactly covering yourself in glory with this thread.

You are pretty much advocating the Beverly Cooper Flynn approach to tax compliance here, salting away money overseas in bogus non resident accounts to evade DIRT.

lets be very careful of our terms here. What BCF did was tax-evasion. What BB seems to be proposing is tax*-avoidance*. The latter is legal. The former is not. For an example of the difference imagine for a moment that I was very rich (if only :smiley:). I would then hire a good accountant with strict instructions to find every single legal loop-hole and cute-hoor way around paying taxes as possible so that I would pay as little tax as possible. I’d probably be a tax-exile to minimise my exposure. Its all above-board and legal. The revenue can come around and look through my books anytime they like and they’ll conclude that I have structured my affairs to avoid tax but from a legal PoV I have a clean bill of health. Pure legal.

Some might say that was immoral. Interestingly my old Bus Org teacher would maintain that it is the absolute duty of every citizen to legally avoid paying as much tax as they possibly can. Which might surprise you if you met the woman because she seems like a nice old dear. But she had zero time for over-paying of avoidable tax. She would tell us that every year she worked our her taxes herself rather than simply trust the revenue (who at time had a rather lax attitude toward these matters I believe). And most years she would work out how the revenue had over-taxed her (usuall hundreds back when hundrends of pounds were well worth getting excited about) and would get after them for the refund. Smart lady.