They might often be associated with the super-rich, but an offshore bank account can be opened by almost anyone, as long as they are over the age of 18 and meet the bank’s eligibility criteria.
An offshore account works in much the same way as any other bank account, with the key difference being that it can be held overseas and in a different currency. You can open an offshore account with many UK banks, as well as providers operating in the Channel Islands, the Isle of Man and Gibraltar.
This guide takes a closer look at how offshore accounts work and what to be aware of.
Why consider an offshore bank account in the UK?
There are many reasons why you might want to consider an offshore bank account in the UK. For example:
You live and work abroad: You might receive your salary in the local currency but still want to access your money in the UK, or you might receive your salary in pounds and wish to keep it in a UK bank account.
You travel regularly for business: If you’re often travelling overseas for business, it can be more convenient to have a bank account in one location.
You’re a resident in an offshore jurisdiction: If you live in the Isle of Man, the Channel Islands or places like Monaco, Switzerland and Liechtenstein, it may be more practical to have an offshore account than a local one.
You’re an expat who can’t access UK financial services: This might be due to your residency.
Benefits of offshore banking for UK residents
If you are a UK resident, some of the benefits of offshore banking can include:
Being able to hold, send and receive multiple currencies
Having access to competitive exchange rates and low conversion fees
It’s a convenient option if you own assets such as property or investments overseas
Enables you to provide financial support for family members living overseas
You only need to hold one account if you regularly move around for work
How to open an offshore bank account from the UK
If you want to open an offshore account, your first step is to shop around and compare your options, looking at fees and account benefits. Once you’ve found a suitable account, you can often start the application process online or in a branch.
As part of this process, you’ll usually need to provide a form of ID, such as a passport or driving licence, and proof of address, such as a recent utility bill. The bank will verify these documents and potentially check your credit rating, before informing you of whether your application has been approved.
Once your account is up and running, you’ll need to pay a deposit into the account and you can then start using it.
Key considerations before opening an offshore account
Before opening an offshore account, it’s worth thinking about the following factors:
Minimum deposit requirement
Most accounts have a minimum deposit requirement that can range from £1 to £10,000, so check that you can meet this. Be aware that some accounts also require you to pay in a regular income.
Financial protection
Money held in offshore accounts is not protected by the Financial Services Compensation Scheme (FSCS). This covers deposits of up to £85,000 per person if your provider goes bust. However, several offshore locations, including The Isle of Man, Jersey, Guernsey, and Gibraltar, have their own financial compensation schemes. It’s important to find out what these are and how much of your money will be protected before proceeding.
The bank’s reputation
If you’re choosing an account with a particular bank, think about how well known that bank is. As a general rule, it’s safer to choose a provider in a politically and economically stable region.
Many UK-based banks and building societies have an offshore arm, such as Lloyds Bank International Limited and HSBC International, so it could be worth seeking out an offshore account with one of these.
Tax implications of having an offshore account in the UK
If you’re a UK resident with an offshore account that pays interest, you’ll need to declare this on your UK tax return.
Tax will be due if the amount of interest you earn exceeds your personal savings allowance of £1,000 if you’re a basic rate taxpayer, and £500 if you’re a higher rate taxpayer (additional rate taxpayers have no personal savings allowance). If you don’t pay this, you could be fined.
If you’re not a UK resident, you will likely still need to declare any interest earned in your offshore account in your country of residence.
How to choose the right offshore account for your needs
Just as you would with any bank account, when choosing an offshore account, it’s important to compare factors such as account fees, minimum deposit requirements, account management, and account benefits such as earning interest on your balance.
Keep in mind that offshore accounts tend to charge higher fees compared to onshore accounts. As well as monthly account fees, you might have to pay for withdrawals, transfers and other payments, so be sure to find out.
Pros and cons of offshore bank accounts
Pros
You can apply even if you’re not a UK resident
Useful for expats or those working abroad
Can be held in multiple currencies
You can protect non-UK assets
Cons
You won’t have protection under the FSCS (although some protections will still be in place)
You may need to pay tax on any interest you earn
You might need to maintain a minimum account balance
Fees can be higher compared to onshore bank accounts
Bottom line
Opening an offshore bank account could be particularly beneficial if you’re an expat or someone who works abroad, or if you own assets overseas. But when comparing accounts, be sure to check what fees you’ll need to pay, make sure you understand the tax implications, and always pick an account with some form of deposit protection in place.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
This new account comes with cashback on direct debits, interest on the balance in your account and a regular saver with one of the best rates in the market.
Looking to open an account with first direct? Here are the current accounts it offers, the benefits of banking with first direct and how to open an account.
Is the digital-only bank the right option for you? Read our review to get the low-down on all of Starling’s features and benefits. We cover everything from Starling’s overdraft service to whether the card can be used abroad.
Is Revolut’s app-only account the solution for you? Our review of this challenger banking brand explores the features and fees of its free Standard plan, and outlines the other Revolut accounts available.
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
