Overseas Dollar Account

I'm a bit of a newbie at this sort of thing, and so I'm seeking advice from people who would have a better idea of the ins and outs of this idea.

With the General election galloping towards us, there is a chance that Labour could get in (but there are threads for that, this is just a bit of context). It is my opinion that the current Labour lot, if they get in, will trash the economy and send the value of the pound crashing with inflation sky rocketing.

The problem with this is my wife and I have a bit of cash stashed in an account. We were planning on using it to stick an extension on the side of our house. With the impending chance of Corbyn getting in I was rather thinking of shovelling the money out of the way of his grubby little fingers, and getting it safe from the train wreck of the economy, it seems the logical conclusion would be an overseas Dollar account.
That way when it all goes tits up, if we're really lucky we can move the money back at an opportune moment and buy up most of our house s we have a fixed rate for the next 4.5 years (another thing I specified due to Corbyn). Also a couple of the companies I contract to use USD as well, so any future work can be paid into that.

As I haven't the faintest idea what I'm doing in this field I thought I'd ask for pointers, what should I be looking for, what should I avoid, any general advice or thoughts?

Thanks.
 

Tyk

LE
This is a real potential minefield as you've got to be careful not to fall foul of tax evasion (criminal offence) law. If you're serious about this and have a fairly big amount of money then you need real professional advice and to be aware that the scheme providers are best avoided totally.
Contractor type finances have been under heavy scrutiny for quite a while and those delightful people at HMRC have been employing Tardis like tactics making things that were legal in the past retrospectively naughty. Being paid by USD companies is still income to be taxed, the basic wheeze of an offshore bank account won't dodge that.
Get proper professional advice from experts.
 
This is a real potential minefield as you've got to be careful not to fall foul of tax evasion (criminal offence) law. If you're serious about this and have a fairly big amount of money then you need real professional advice and to be aware that the scheme providers are best avoided totally.
Contractor type finances have been under heavy scrutiny for quite a while and those delightful people at HMRC have been employing Tardis like tactics making things that were legal in the past retrospectively naughty. Being paid by USD companies is still income to be taxed, the basic wheeze of an offshore bank account won't dodge that.
Get proper professional advice from experts.
I wasn't trying to duck tax, indeed the payments from that are of secondary importance, its the large sum of savings that are my main concern.
 

Tyk

LE
You mentioned clients potentially paying in USD direct to the account which is why the alarm bells rang.

If you just want to use it as a safe haven for tax paid cash there's much less risk, but if you want to use it as a haven against a possible Cobynite raid then again there's the tax beast rearing its very ugly head. Hedging against currency fluctuations on tax paid cash isn't silly, but never lose sight of the fact that there are transaction and currency conversion fees to pay that remove some of the potential benefits.
Offshoring money has some risks as of course you wouldn't be covered by the UK banking regs which offer a safety net. I have several accounts denominated in currencies that aren't Sterling due to the way I do business, but are in UK banks and another in Belgium, if a Government went raiding none of them would be safe.
 

4(T)

LE
If you want your money to be safe-ish from Magic Grandpa, then you probably need to look outside the EU - or even outside Europe itself (given that even Switzerland is now in the pocket of EU tax authorities). E.g. I have old USD and Euro accounts in Lloyds International - supposedly offshore, but in reality no different from any UK high street bank in the extent to which HMRC and other authorities have open access.

Now this isn't about dodgy tax or anything, but just the fact that, where HMRC or European tax inspectors can peek, then there is no obstacle to a UK or EU government to dip in if they potentially decide they need a small "social levy" or something...

I normally use local USD accounts in the countries I work overseas, because of the nature of the local economies and because expat salaries are often paid in USD.

Most of the big international banks have branches outside the EU (Citibank, Barclays, HSBC, etc), but one thing you have to check is whether your account is part of their wider international division or if its a ring-fenced local subsidiary (eg my account in Raiffeisen Bank in Moscow was limited to the branch itself, so even the bank debit cards would not work in a different branch in St Pete).

I guess the best strategy would be to check out account-opening criteria (ie non-residents are permitted) in a few countries that have fairly firm economies, and then reduce your risk by splitting your pot amongst several jurisdictions.
 
As long as you have paid any taxes due you can shuffle the money off to anywhere that will let you open an account and accept it.

Likewise as long as the money is not the result of criminal enterprise you can shuffle it off.

The problem is that with the global,war on terror the US put pressure on many countries and it is now more difficult to open accounts without being able to demonstrate residence, property ownership, or a business need.

HSBC used to open accounts for customers in designated branches around the world. It is how I opened my US account before I moved here to the US, and I can still shuffle money between the US and UK using mouse clicks. So in the first instance go and ask at HSBC - you may need to tell them you are planning to buy a holiday home in Florida and need somewhere to store the funds.

Other than that you could always go and buy a bag full of $, or buy some gold. The best place to buy gold used to be Jersey because it was VAT free, they were talking about plugging that little loophole, but still,worth checking. If buying bulk foreign currency you can get wholesale rates from some banks/currency traders so that is worth googling - I forget who I used, but it was no more difficult than going to the post office as they couriered the cash out as part of the deal.

Australia is always an alternative to the US. A mate of mine opened an account out there when he was sent on exercise Long Look for 2 years. He still carried on sending money over when he returned to the UK as they were offering much better interest rates than the UK.
 

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