August 29, 2009

Giving money a passport for growth

This week appears to have ended with the rest of Europe apparently coming out of recession. Yet we in Britain are somehow even deeper in the mire. No wonder finance gurus are recommending offshore bank accounts and finance. In fact with no end to the recession in sight there will surely never be a better time to start looking into offshore financial service.

The only snag with all this of course is that you need to have some money to start off with. Then the benefits begin to stack up. There is the slight worry that your money is offshore – and might not come back when things get sticky. Icelandic banks pop into mind at this juncture.

But this time things are different. You see all our banks and building societies seem to have cottoned on to the idea of locating somewhere with conveniently low tax rates. You don’t even have to send your money anywhere too worrying Jersey seems to do very nicely for most of our high street banks for offshore financial service.

Then all they need so is bombard their customers with tempting mailers, emails and phone calls highlighting all the potential benefits. Top of these is the fact that you should make more money because the tax rates are so much lower. And there in a nutshell you have it. These little wheezes are for high rate tax payers.

But not necessarily. As well as saving on income tax on any income, there is the small matter of inheritance tax to consider. It’s a fair bet that you are going to die at some point – and most of us can think of something better to do with 40% of our hard earned savings than give it to the government.

I wonder if the rush into offshore financial service is in no small way contributing to the stagnation in this country. After all, if we are trying to hoist ourselves out of recession…. Investing in our own economy rather than somebody else’s seems a better option.

So for now I will just have to restrict my foreign currency speculation to seeing if the cash machine at Sainsbury’s can be fooled into taking unwanted foreign currency. And I already know the answer to that one - no.

Giving money a passport for growth

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