Nigel Green sets the record straight on issue of offshore banking
The issue of international banking and offshore accounts has come to the fore, following the recent damning claims that HSBC helped its clients all over the world evade hundreds of millions of pounds in tax by hiding funds in accounts in Switzerland.
Fuelled by last week’s BBC Panorama programme, entitled ‘The Bank of Tax Cheats’, a subsequent poll undertaken by YouGov and The Times newspaper asked people their views as to why Britons might hold Swiss bank accounts. An overwhelming 76 per cent believed people would have a Swiss account for “underhand reasons”, with just one in 10 claiming it would be for “legitimate reasons”.
In the International Adviser article, Nigel Green expresses his concerns that the results of the poll were perhaps swayed due to Panorama and other prominent reports into HSBC’s operations in Switzerland, which did nothing whatsoever to reinforce the fact that offshore bank accounts are in no way illegal.
deVere Group, a major force within the international financial services industry, and the CEO is driving home the fact that although there are a number of illegal motivations why people might have offshore accounts, there are more, and legal, reasons to do so.
A standout reason is convenience. A large majority of deVere Group’s 80,000 predominantly expatriate client base have offshore bank accounts because it is easier for them to manage daily living expenses and bigger expenses such as education fees. For expats, who tend to live a transient lifestyle, an offshore account provides safe, easy access to their money wherever they live currently, and may choose to live in the future.
Another great advantage, as Nigel Green, who has had a number of Swiss accounts himself, points out, is offshore accounts allow a broad range of multicurrency savings and investment vehicles. But possibly the main advantage of offshore banking is the ability to legally mitigate tax burdens, and the fact they are usually located in lower-tax jurisdictions. This allows individuals to capitalise on their savings more efficiently.
The fact of the matter is, and one which Nigel Green stresses in the article, although banking offshore can help clients legally mitigate their tax liabilities, people who are obliged to declare their assets and pay tax must do so. Tax avoidance is legal. Tax evasion is not. It is not a question of morality. Tax is a legal impost and it is up to us to pay what we are required to by law, we’re not expected to pay anything on top of that.
Therefore if offshore banking clients pay the required amount of tax, then holding such an account is completely within the law, and often forms part of a robust, financial strategy.