What is the point of an off-shore bank account when working outside of the UK?

Question

I currently work in Malaysia, and am considering whether to take part of my salary paid into an offshore account. I understand that the element of my salary which will be paid offshore will not be subject to Malaysian tax.
However when/if I return to the UK, if I want to move the money to the UK (which I would have to in order to spend it) will I have to pay UK tax on the money? Is there a legal way round this?
As I believe local tax on income is less than UK tax, I can not see the benefit on having any of my salary paid into an offshore acount. (Surely it makes more sense to pay (lower) local tax on my income, then I can move it into the UK with no UK tax implications)
Most expat financial advisors appear to be gearred towards setting up offshore accounts and presumealby they are handsomely rewarded for doing so. Therefore I am looking for some neutral advice on this matter. At this stage I do not know how long I will remain outside of the UK, however another 2 years is very likl

Answer 1

Yes it is a tax thing.
Depends on how long you are staying outside of the UK
I moved to Ireland and until recently they operated a remit scheme. Whereby you only paid tax on the money you brought into Ireland. The rest whent offshore. To do it properly you have to de regester for tax in the UK. You then register for tax in the country you are working and meet thier tax obligations.
The money in the offshore account can then be sent to a UK bank account later or you can of course draw out the cash from a hole in the wall. You need to do it so it falls on UK tax periods. If you return to the uk inbetween a tax year you will have some messing about to do as part of your earnings will then be eligible for UK tax. There are other benifits but its a bit long winded

Answer 2

the extent to which you pay tax in the UK depends on your tax residency status. The rules are complicated. It's very difficult to answer your question without knowing your tax status.

It sounds as if you are british but are an expat in malaysia

You may have been out of the UK long enough for the amount that you earn in malaysia not to be subject to UK tax. if this is the case, you might not need an offshore bank account

Answer 3

Account manager for city Bank creating accounts in Jersey told me that if you have an account in Jersey that you are paid into and you draw that out as 'capital' because you set this up as a business, you pay Jersey tax rates which are negligible!

Answer 4

higher interest rates
why dont you have your visa bill and DD paid from it?