“Thank you for your letters. I wonder, though, if they are directed mainly at U.S. citizens. I am a UK citizen.
“Panama sounds tempting. I am currently living in Spain and have property in the UK also. If I were to become resident in Panama, do you know if I would still be liable for taxes over here, inheritance tax, for example?
“If I were to put money into a Panama bank, could I keep my deposits in sterling? Would the interest be paid gross? How much interest is being paid at the moment?
“I am considering taking a trip to visit you there, but the answers to these questions in advance would help.
— Peter S., Spain
You’ll need to consult a tax advisor, dear reader, but I’d say that your UK property likely would be liable for inheritance taxes in the UK, depending how it’s held (in your name, in a corporation, etc.).
Yes, you should be able to keep funds in sterling in an investment bank in Panama.
Note that you would be liable for income tax on any account interest you earn in Panama even if you’re not a resident here, so you may be better off establishing a bank account elsewhere in a jurisdiction where they don’t tax non-residents on interest income. You could still live in Panama, where the interest income wouldn’t be taxable (as long as it’s not generated in Panama).
The sterling interest rates for an account in Panama or elsewhere would be tied to the rates in the UK and should be similar to what you’re earning there.