Panama Papers leak will have negative impact on expat banking options

By | 18 April 2016, 12:00PM | The Telegraph

Relatively few UK expats may be directly caught up in the scandal of the Panama Papers, leaked from Panamanian law firm Mossack Fonseca, which revealed how the rich and powerful use tax havens to hide their wealth.

However, many of them could be affected if the knock-on effect is a clampdown on all offshore centres. Such centres, which include the Channel Islands and Isle of Man, offer savings accounts to expats who want to put their money with familiar UK banks but can’t use those onshore because they don’t live in the UK. They also offer investments and insurance tailored for expats.

Howard Bilton, chairman of the Sovereign Group, which specialises in offshore trusts, said: “The banks in the main offshore centres are extremely nervous of taking on any clients who are not resident in their jurisdiction. That was the case prior to the Panama Papers but these latest revelations will make it even harder for expats.”

Already, the number of banks in the traditional offshore centres offering savings accounts for expats has fallen thanks to increased regulatory costs making it an unattractive business for the parent company. Add on years of low interest rates, and it’s understandable why many have shut up shop.

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