Investing in Savings Accounts when living overseas

carn1x

I currently live in HK, have done so since March 2010. I've got a bit of money in a current account, which I ripped out of my ISAs I had at the time since the terms stated, if I recall, that I had to be resident in the UK to hold them.

However I do plan on returning to the UK in the next fews years possibly, am I still eligible for regular savings accounts? Since I'm not earning in the country, I'll certainly be under the tax threshold. Could I have trouble acquiring the savings account whilst overseas?

I don't particularly want to transfer the money to HK, as I'll probably transfer it back one day anyway, and it would eat into any interest I'd want to make on it anyway.

Thanks for any advice!

Loughton_Monkey

Sad to say, you have probably burned some expensive bridges.

Going to work in HK makes you 'non resident for tax purposes'. This means you can leave whatever savings you have in UK where they are, and you don't have to pay a penny tax on them any more (until you come back). This makes a 'normal' savings account just about the same as an ISA while you are away.

However, if you have taken out all your ISA's [which you were legally able to keep - because only new contributions are disallowed] this means that when you return to UK, you have lost forever the cumulative effect of their tax free status.

Had you set up savings accounts before you became non-resident, then you can keep them and use them. However, UK banks simply do not allow new accounts for non residents as a general rule.

Given where you are now, I think your only alternative is to use Offshore accounts, of which there are many to choose from in places like Jersey and Guernsey. They exist (amongst other reasons) for people just like you. They used to pay interest 'gross' but European law imposed a 15% 'withholding tax' - fully refundable for UK citizens not resident for tax purposed (like you). I think you can apply to have the tax not deducted at source. You are, of course, subject to HK taxation but I expect they have no practical way of taxing your offshore interest, or even knowing about it.

Advice to anyone going abroad for 12+ month who will become non resident for tax purposes is:

1. Absolutely max out all ISA savings (cash and Stocks & Shares) for the tax year of departure.
2. Same for pension contributions - up to limit of salary that [partial] tax year if possible.
3. Whilst still UK resident, strike up as many bank accounts with as many banks as you can to provide ongoing Internet savings account whilst away.
4. Similarly for year of return, make maximum ISA contribution (and the £3,600 pension limit) before the end of that tax year.

atush

Oh dear What a mistake you made. You should have left them oney in the ISAs as you can keep them after you emigrate.

If you still have any UK accounts, then you can open up new savings accts with them online. Some you cannot sign up for once abroad- esp ones by certain buliding societies like say Nationwide.

Alibobs

Rats. I'm in same position as the OP (non-dom, different non-EU country), and really wanted to open a UK savings account to transfer money I'm saving from here and build up my house deposit for when I get back in a year or so's time. I have a UK current account, with money in it, but from what you've said the only place I can move that is offshore? (I've asked my own bank, they said they couldn't open savings account for non-UK resident). My accountant didn't seem to think it would be a problem before I left though. Is it really true, no UK savings account if non-UK resident?

(PS Wow, thanks MSE for the sweet thought!! Wish other forums had this :-) )

slinga

Loughton_Monkey wrote: »

Going to work in HK makes you 'non resident for tax purposes'. This means you can leave whatever savings you have in UK where they are, and you don't have to pay a penny tax on them any more (until you come back). This makes a 'normal' savings account just about the same as an ISA while you are away.

.

Times may have changed then.

I thought even when you were non res for tax purposes that any income generated in the UK be it savings account interest or income from a property rental was subject to UK tax.

Please correct me if I'm wrong.

Oh and isn't non dom different from non res??