A bank account has been launched by the Derbyshire (Isle of Man) that delays payment of interest unt...
A bank account has been launched by the Derbyshire (Isle of Man) that delays payment of interest until the account is closed, making it potentially useful for those wishing to manage the consequences of the EU Savings Tax Directive.
Because the directive only applies to EU tax residents, and to interest paid, a user of this account can save the interest in expectation of going abroad, at which point they can close the account and claim the interest.
The Derbyshire points out that the launch of the account is unrelated to the STD, which came into effect in July. Fiona Passey, director of offshore banking, explains that the product is about giving their customers greater flexibility when working towards a change in lifestyle, which leads to change in UK tax obligations, such as impending retirement.
"The Interest Accumulator account is not about not paying tax, it is about profiting from changes in taxation," she said. "You could be planning for your retirement, downsizing or intending to move abroad. Alternatively, if you are an expatriate returning to the UK between contracts and you intend to work abroad again, this might be the right account for you, if you have established non-residency for UK tax purposes."
The account can be accessed after a six-month period and terminated any time after two years. There is a minimum of £10,000 and a maximum of £2m. Interest rates range from 4.45% gross/AER to 4.6%.
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