Moving abroad doesn't mean banking abroad

Wednesday September 20th 2006

James Featherstone

Technically speaking, it is possible ? just ? to hang on to your normal onshore bank account if you move abroad to live and work.

Debit systems, account-linked credit cards and international payment pipelines can make domestic arrangements work abroad. But only in a clunky, utilitarian way. You are likely to lose out on a lot of tailored expatriate banking services that the big international banks are increasingly offering as a matter of course. They are, after all, designed around normal expatriate needs, such as cross-border transactions and tax efficiency at source.

If you are moving abroad for more than one tax year (not 365 days), you should be able to take advantage of a lower tax rate. In fact you shouldn?t be liable for UK income tax at all. Having an international bank account makes arranging tax exemption much easier, as banks are geared up for it.

For most expatriates, the best type of banking arrangement is to have a local currency account in the country you are moving to for daily expenses, and an offshore account to receive your (dollar, euro or sterling) salary. The latter accounts are also designed for multi-currency transactions, which are useful for expatriates. Normal onshore accounts are not.

You should set up a savings account as a matter of course. But don?t automatically open one with your current account bank. Many big international banks offer pitiable rates of deposit account interest. It isn?t the business they are chiefly interested in, so they tend not to be bothered with throwing incentives in that direction.

Much wiser is to look at one of the numerous specialised deposit-takers on one of the mainstream offshore islands ? Jersey, Guernsey and the Isle of Man. They are as familiar (on the whole) as the former UK building societies.

Obviously, it is going to be easier to establish a day-to-day local currency account in some countries than others. To put it bluntly, if you are in the developed world, a familiar high street bank such as HSBC is effectively a global, non-country-specific bank now, and so should be able to give you local currency service. In other places you may find it more difficult. You may even have to demonstrate a credit rating, or even build one up. But this is unusual, so don?t be put off if the first local bank you approach hits you with the request. Try elsewhere.

The simplest thing to do is stick with your local high street bank, but get it to open an international account for you. All the main candidates ? Barclays, HSBC, NatWest, Lloyds TSB ? offer an international service.

Some offshore subsidiaries of UK banks

Abbey National Offshore
Base: Jersey
Tel: (+44) (0)1534 885100

Alliance & Leicester International
Base: Isle of Man
Tel: (+44) (0)1624 678285

Bank of Scotland International
Base: Jersey and Isle of Man
Tel: (+44) (0)1534 613500

Barclays International
Base: Jersey, Guernsey and
Isle of Man
Tel: (+44) (0)2071 147300

Bradford & Bingley International
Base: Isle of Man
Tel: (+44) (0)1624 695000

Anglo Irish Bank
Base: Isle of Man
Tel: (+44) (0) 1624 698000

Lloyds TSB Offshore
Base: Channel Islands and
Isle of Man
Tel: (+44) (0)1624 638000

Nationwide International
Base: Isle of Man
Tel: (+44) (0)1624 696036

NatWest Offshore
Base: Channel Islands, Isle of Man and Gibraltar
Tel: (+44) (0)1534 282300

Yorkshire Guernsey
Base: Guernsey
Tel: (+44) (0)1481 710150

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