Going abroad - where to leave money

chewmylegoff

Hello,

My sister is working abroad for a couple of years under an employment contract. She will be non-resident for tax purposes as the employment contract covers the whole of the 2009/10 tax year. She left the UK a couple of weeks ago (yep, that's right, she should have sorted this all out before she left :rolleyes:).

She has a decent amount of savings which will be staying here. However, most bank accounts say you need to be a resident to open them, and she is currently earning next to no interest - she really needs to move her money.

Does anyone know of an account at a UK bank (or a fixed term bond) which is open to non-residents and pays interest at a non-derisory rate?

She still has a UK address as her OH is here and they have a tenancy agreement which she is still on and will remain on - can she just use this address and open an account, or does she have a legal responsibility to advise the bank of her non-resident tax status?

Thanks for any assistance.

Reaper

How about saving the money off-shore? You will find all the usual banks have off-shore arms set up in places like the Isle of Man aimed at people such as her who are non-residents and pay the interest gross.

The only thing to be a little wary of is they are not covered under the UK's compensation scheme if the bank were to go bust. They have their own local compensation schemes instead.

KingL

If she's only away for a couple of years she may be non resident, but still ordinarily resident. This might make a difference.


ed: gory details here

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dancingdandare

As long as she is still ordinarily resident then there is no problem and has a uk address? is that the case???

just open uk accounts and claim for gross interest.

:beer:

BritRael

chewmylegoff wrote: »

...She will be non-resident for tax purposes ....Does anyone know of an account at a UK bank (or a fixed term bond) which is open to non-residents and pays interest at a non-derisory rate? ....

She would be non-resident for tax purposes, not non-resident. Just open any account she likes, and fill in an R85 form to get gross interest.

Just one question though; you said she left a few weeks ago, but will be out for the whole of the 09/10 tax year? If she did leave recently, he nrftp status would not start until April 2010 as it is based on the number of days (during a tax year) spent in the UK, not the start date of the contract.

Biggles

I believe an R105 is the correct form for ex-pats to get interest paid gross, not R85. But some banks don't accept them; Nationwide is one.

chewmylegoff

BritRael wrote: »

She would be non-resident for tax purposes, not non-resident. Just open any account she likes, and fill in an R85 form to get gross interest.

Just one question though; you said she left a few weeks ago, but will be out for the whole of the 09/10 tax year? If she did leave recently, he nrftp status would not start until April 2010 as it is based on the number of days (during a tax year) spent in the UK, not the start date of the contract.

i don't think you're right there - did check this out and it seems that she becomes non-resident from the day after she leaves the UK, as long as the employment contract covers at least one full tax year and she takes up employment immediately, which both apply.

http://www.hmrc.gov.uk/cnr/hmrc6.pdf para 8.5 deals with.

hanwellmike

I was out of the UK for 3 years recently like your sister (not ordinarily resident for tax purposes). I did not bother to move my savings as (a) there were no better interest rates elsewhere and (b) they were already legally in place. I did open an offshore bank account with Barclays for my overseas earnings and they did pay interest gross. The interest on my old savings was paid nett and I simply claimed back the interest from the tax man when I did my tax return. I would not have thought it worth moving any existing savings. It's possible you can ask for the interest to be paid gross on those accounts if you have the relevant form.

timydog

My uncle is abroad, in the States, has savings here, paid net of tax, just fills in one of these each year;

http://www.hmrc.gov.uk/CNR/allow_nonres.htm

The tax he does pay after his refund, well there is a double taxation treaty, just offset what you owe where you are living against what you have paid to the UK tax man.

Jonbvn

chewmylegoff wrote: »

i don't think you're right there - did check this out and it seems that she becomes non-resident from the day after she leaves the UK, as long as the employment contract covers at least one full tax year and she takes up employment immediately, which both apply.

http://www.hmrc.gov.uk/cnr/hmrc6.pdf para 8.5 deals with.

I think this will come under "split year treatment". See paragraph 2.4 for further details.

nico26

Jonbvn wrote: »

I think this will come under "split year treatment". See paragraph 2.4 for further details.

I agree as the tax year began in April she will be split year for 2009/2010 tax returns. 2010/2011 will be full year non ordinary residence.