With the global spread of the coronavirus disease 2019 (COVID-19), the way we think about money has changed a lot. Leading global economies have faltered, millions have lost their jobs, and almost a fifth of ALL US dollars was printed in 2020! Up until recently, we were all obsessed with what we could get in terms of 'consumer durables' and how much we could borrow to advance our spending power, but everything has been turned on its head today.
Saving is the new spending, and there are plenty of easy ways you can develop a positive savings habit. For example, you can pay yourself before you pay anyone else when your salary cheque arrives. i.e., moving a portion of your income into a less accessible savings account each month so that you do not waste that money, but instead, you save it for a rainy day. Similarly, if you are a business owner, it could make good sense for you to set up an offshore bank account because such an account structure could benefit your finances.
Perhaps the most significant advantage of opening an offshore bank account is that it allows you to defer the payment of taxation on the interest that you earn. Generally speaking, interest is paid gross, i.e., without the deduction of tax. This means that your savings have a booster for the tax year as interest is paid each month on a larger sum. At the end of the tax year or the end of the term of your savings account, you may well have a taxation liability. Still, because your money has grown in the interim without tax being taken away, this can have a booster effect on your money's growth.
For some, offshore banking services can help legitimately avoid tax. However, never assume you have no tax liability; such an assumption could land you in serious trouble! Always determine your liability because when it comes to tax, ignorance can never be an excuse.
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