The undoubted tax benefits of keeping your money in a foreign country; weighed against the regulatory downside.

Offshore banking isnt necessarily only for the very rich. It means avoiding the British taxation system by putting your money in a country with a more favourable (i.e. cheaper!) tax structure. If you run a flourishing business or have just received an inheritance; give some time to evaluating offshore options before popping the money in a tin under your bed.

Offshore banking is confused in many peoples minds with private banking, because both are largely the preserve of wealthy people. But the difference is clear. Private banking is indeed banking by private relationship, and is definitely for high net worth earners. Offshore banking literally means banking under a different financial regulatory regime to the one in place in your home country. It is therefore primarily a tool either for expatriates or for those for whom it is most tax efficient to move money out of the UK. As we actually have a very equitable tax system (in many countries the top rate of tax is 50% or more), it is in practice only the more well-off people who engage in offshore banking. Tax havens where UK tax regulations do not apply include the Isle of Man, the Channel Islands and further afield Switzerland, Luxembourg, the Cayman Islands and Bermuda.

Offshore banking also refers to the breadth of investment opportunities available under these different countries regimes; but that also means you dont have the protection of the UKs Financial Services Authority, and there are plenty of scams operating offshore, so get advice before you invest. All the main banks and private banks have offshore divisions which will assist you; many fund management houses (e.g. Lazard, Hill Samuel, Rothschild) also provide offshore investment, or you can head for a specialist consultancy such as Walbrook or Brown Shipley