Investing UK based money whilst living abroad

mxh

I've seen this subject mentioned a few times, but mostly along the lines of:-
Question - Can I open a new bank account whilst living abroad?
Answer - No, you can't. End of discussion.

The issue is that I'm living abroad and have approx £40,000 sitting in a UK bank account earning about 0.1% ie pretty much nothing. The question is, how can I best make that money work for me?

I don't want to bring it to Australia as the exchange rate is so bad at the moment. I can't open a new bank account in the UK with a higher interest rate as I'm not resident there. I can't put it into an ISA. And I don't have any UK debts to pay off.

I could invest it in property, but that would mean taking out a BTL mortgage - not sure I want to do that.

Any other ideas as to how I can make this money work for me?

And what about any slightly 'left field' ideas - for example, could I 'give' it to a relative in the UK and get them to open an account and move it around getting the best rates?

innovate

mxh wrote: »

And what about any slightly 'left field' ideas - for example, could I 'give' it to a relative in the UK and get them to open an account and move it around getting the best rates?

Your choice entirely. Just be aware that it becomes their money if you "park" it with them, and they have no legal obligation to return it to you.

It isn't entirely correct to say you cannot open an account with a UK onshore bank if you are not a resident. Though your choice is severely limited. Search the forum for more.

You also have the choice of offshore accounts. Again, that has been discussed before so you can search for it.

gozomark

mxh wrote: »

I don't want to bring it to Australia as the exchange rate is so bad at the moment.

do Australian banks offer £ accounts ? If so, the exchange rate is irrelevant

mxh

innovate wrote: »

Your choice entirely. Just be aware that it becomes their money if you "park" it with them, and they have no legal obligation to return it to you.

Really? I thought this option would be shot down straight away. I wouldn't have thought it would be straightforward to give someone £40k with no questions asked / no tax to be paid etc

innovate wrote: »

It isn't entirely correct to say you cannot open an account with a UK onshore bank if you are not a resident. Though your choice is severely limited. Search the forum for more.

True, but they don't offer interest rates any higher than my current UK account.

gozomark wrote: »

do Australian banks offer £ accounts ? If so, the exchange rate is irrelevant

They do, but the interest rates offered are between 0% and 0.15% from what I can see - and they charge you a monthly fee for the privilege

RetiredInThailand

Just open a term deposit account in your name with one of the onshore banks that accepts non-resident account holders. Be sure to fill in form R105 (if that bank accepts it) so as to get your interest paid gross. Failing that you can reclaim the tax paid up to your personal allowance (assuming no other UK income).

As far as I know you will have to declare it in Aus and pay tax on it there. If they dont have automatic exchange of information yet you can bet that they will have it sooner rather than later.

As for giving it to someone to deposit on your behalf, this could open up a huge can of worms if you or they died suddenly, or indeed if they got divorced or got Alzheimer's or something.

And even if you did that you would still be paying 20% withholding tax which you could no longer reclaim and it may even kick the other person into a higher rate tax band, depending on their circumstances. Oh, and it could easily be considered to be money laundering. So that is a particularly bad idea.

CKhalvashi

If you're thinking of investing, I'd have a serious word with HSBC, as they have branches in Australia (I've been served in Aus, in one of the branches, as UK customer)

HSBC are (I think, as this was discussed in the office yesterday with a non-dom employee) offering up to 1.5% with their Expat package on GBP deposits, but it's worth shopping around for the best deal.

CK

mxh

CKhalvashi wrote: »

If you're thinking of investing, I'd have a serious word with HSBC, as they have branches in Australia (I've been served in Aus, in one of the branches, as UK customer)

HSBC are (I think, as this was discussed in the office yesterday with a non-dom employee) offering up to 1.5% with their Expat package on GBP deposits, but it's worth shopping around for the best deal.

CK

Checked out their expat packages - shows "up to" 1.25%pa for fixed terms of "up to" 5 years - there's no more details but I'd bet that you need to lock it away for 5 years to get that rate.

Think I'll have to look into offshore accounts - seems that's the only way to get any sort of return.

RetiredInThailand

mxh wrote: »

Think I'll have to look into offshore accounts - seems that's the only way to get any sort of return.

Suit yourself but you will get sod all offshore these days, and personally I have zero faith in the offshore deposit protection.

http://www.pnbint.com/fixed-deposits.asp

bigadaj

You could notify the bank of a change of address to your relatives such that correspondence is sent there. I did this with my parents for a couple of years when living in Hong Kong. You obviously have to trust the relatives, and you could run into tax and domicile issues if the oz and uk tax systems liaise but it might be an option.

The other issue is ibviously you don't get much in the UK now anyway, you're doing well getting much over 2% without locking the money away for a long time.

xylophone

Could you lend it to your parents / a trusted relative at a certain rate, the interest to be rolled up and paid to you at a time you stipulate?

http://www.money.co.uk/savings-accounts/fixed-rate-bonds.htm

You would wish to set up a formal witnessed document - be aware of the tax implications specific to your situation.

atush

Personally, I would be investing some of it, but if you want to look at deposits, look at Birmingham Midshires as they take offshore residents.