Bank accounts - do we have to close existing accounts?

[vickyplum]

My husband and I are due to move to the US later this year. We currently live in the Channel Islands which are classed as an offshore financial centre. Will we have to close our bank accounts here when we move to the US? The tax advantages to maintaining our accounts here are quite substantial and in the long term maintaining offshore accounts would be beneficial bearing in mind how difficult they are to open if you live outside the islands.

All help gratefully received.

Cheers
- VP

[Rachel_Heath]

Danger - Danger! The US views offshore accounts as any other account. As a permanent resident you are required, by law, to declare any interest you receive in the accounts to the IRS.

In addition, if you have more than $10,000 in the account then you're required to file a report to the treasury department (2004 CFR Title 31, Volume 1).

The IRS has already started to perform detailed analysis of credit card transactions made using offshore accounts. If it finds any use of these transactions there's a very high chance that you'd be prosecuted for tax evasion which, being a felony, could end up at with you loosing your alien resident status for life.

So I'd highly recommend you keep the account for use as a pounds sterling honeypot but NOT for any tax benefits.

[vickyplum]

Originally Posted by Rachel_Heath

Danger - Danger! The US views offshore accounts as any other account. As a permanent resident you are required, by law, to declare any interest you receive in the accounts to the IRS.

In addition, if you have more than $10,000 in the account then you're required to file a report to the treasury department

The IRS has already started to perform detailed analysis of credit card transactions made using offshore accounts. If it finds any use of these transactions there's a very high chance that you'd be prosecuted for tax evasion which, being a felony, could end up at with you loosing your alien resident status for life.

So I'd highly recommend you keep the account for use as a pounds sterling honeypot but NOT for any tax benefits.

We fully intend to declare the accounts and pay the necessary tax on any income. Our intention is to open US accounts for the day-to-day of living but keep our accounts here for savings etc.

Thanks for the heads up!

-VP

[Rachel_Heath]

I brought it up only because of your statement

The tax advantages to maintaining our accounts here are quite substantial

is all. Glad to be of help though.

When I came out here I too had a offshore account, this one in the Isle of Man which was quite useful for a time, but after several years living out here I decided it was no longer worth keeping open.

The one thing to keep in mind is the exchange rate. Currently it's a historic highs so you'll get much more buck for your pound!

Good luck