Saving in UK from abroad possible?

Dragonfli

Hello,
I'm new to posting on the forum but need savings advice which doesn't seem to feature elsewhere!
I'm English working and living in France paying French taxes (joy). My family (in England) frequently give me money to buy my children birthday/christmas/extra presents and up to now to avoid the exchange costs I pay it into my Bristish current account and use the equivalent amount in Euros from my French account to buy them their toys. All works fine BUT now I have pounds I don't use that are just sitting in an account in the uk.

If I transfer them to France I will lose some in the echange and besides the saving accounts here are about 1% so not really worth it.

Where can I save in the uk being not a uk resident? Do I have to pay uk or French taxes (at the moment as I earn nothing in England my taxes are straightforward french ones only) on any interest I earn? Is there a savings account that makes it worthwhile? What will happen if the UK leaves Europe?! (I know you won't be experts on the French tax system - even the french tax office isn't that...) Any ideas would be food for thought. :beer:

bowlhead99

As a British national, or a French resident, and in your case, both - I think you would get the standard UK personal allowance this year. As you don't have any other UK income, you'd need a monster amount of GBP in an account in England to earn enough interest income on it to start paying UK tax.

However, France would want to tax you on your worldwide income so I assume your few pounds of UK income would just get added on at your marginal rate in France (with no relief needed for double tax because UK didn't charge you anything).

All the top savings rates you hear about on this forum are for special deals for UK residents meeting the various terms and conditions of operating current accounts to qualify and earning 3% or 4% or 5% on whatever balance is left in their current account each month after putting at least £x through it, up to a maximum of £y. So far as I know, non residents can't access these (I'm sure someone will correct me if there's an exception).

Outside the special promotional extra value current account deals, the general rates for savings are pretty poor (our base rate is a bit higher than Euro-zone but not much). So you're not going to make a killing.

As an expat you could open up an offshore savings account with say Nationwide International or Lloyds, but the rate on them is paltry at Lloyds (0.5% including a first year's bonus that will fall away), and Nationwide will give you 1.25% (again including bonus) or a bit more if you don't need instant access or want to lock the cash away for 2-3 years in a no-access bond. But this type of account has a £5k deposit minimum which may be too rich for your birthday present leftovers.

With rates so low everywhere at the moment (you don't say how much money you have sloshing around but 1% p.a. pre tax on £1k is less than a tenner after tax) it is probably not worth shopping around for rates and deals. It makes sense to have some sterling hanging around for future trips to visit the family, rather than losing a few percent to bring it over to France as Euros, but there is not much money to be made on small amounts. And of course if you deposited a bigger chunk of GBP, you'd be taking quite a gamble on exchange rates given you are mainly needing Euros for day-to-day living... the interest rate paid to you in the short term each month or year is insignificant compared to the potential direction and severity of exchange rate movements over time.

Dragonfli

Thanks for your reply. We often have the impression that savers get a better deal back home but seems you're pretty much in the same position as we are. I did get fed up of looking into these great deals only to find in the small print "uk residents only" :-( I'll just have to splash out on holiday then ;-)

Not got thousands in the bank a few hundreds.

Archi_Bald

Who is your UK bank account with, Dragonfli?

Dragonfli

HSBC at the momont

Archi_Bald

Would the HSBC Regular Saver be of any use to you? You can pay in up to £250 a month and it pays 4% AER. Your money is locked up for 12 months, and on maturity, you can just start the whole process again.

Depending on your residency status and your ability to proof it (e.g. with a bank statement showing your UK address?), you might also be able to open a current account elsewhere. TSB would be the most desireable one as they pay 5% in the TSB Plus. You are allowed 2, and you need to pay in £500 a month. That £500 can simply be a couple of standing orders on the two accounts, swapping £500.

bowlhead99

Archi_Bald wrote: »

Depending on your residency status and your ability to proof it (e.g. with a bank statement showing your UK address?), you might also be able to open a current account elsewhere.

As mentioned further up the thread, these types of accounts are not for non-residents. On the TSB application right at the start (literally before you get the chance to start filling out the 'about you' boxes, it says "you need to be aged 18 or over, a UK resident, ..." and it mentions that it will send your details off to a credit reference agency.

As someone who lives and works in France and pays their tax over there, does not account to the UK taxman for what they do and does not maintain a life here (other than having an old account collecting kids' birthday and christmas presents), I would suggest that there is no point lying to a bank to get them to pay you £25 of interest (before tax) on £500 or so.

Sure, you might be able to pull the wool over their eyes with your HSBC bank statement if you kept a UK address on it, and allow them to falsely identify you as being based out of that UK address and whatever other previous addresses you had. But for the nominal amount of cash that you could make out of it, if I was not a UK resident I would not be declaring to a UK financial institution (who reports to HMRC) that I was a UK resident. Might feel like I was getting one over on the banks through temporarily getting access to a product that they don't want to give me, but I wouldn't fancy the idea of them getting one back over on me.

I appreciate that Archi said 'depending on your residency status' but based on your other posts it does not sound at all like you are a UK resident, whether or not you have a bank statement that might be showing an old address.

Dragonfli

No, I would no way qualify for UK resident status. My bank sends statements to my French address, I pay no tax in England and we have no property there. We visit at most once a year. I really only have a UK bank account to be able to cash cheques in pounds.

bryanb

Dragonfli wrote: »

No, I would no way qualify for UK resident status. My bank sends statements to my French address, I pay no tax in England and we have no property there. We visit at most once a year. I really only have a UK bank account to be able to cash cheques in pounds.

If you opened a UK savings account you would become a taxpayer automatically as tax is deducted from savings accounts, unless you are eligible to sign R85.

Dragonfli

I can't find on the HSBC saver that I need to be a UK resident.... just have a bank account. I'll hvae a look at that one.

Dragonfli

Would they tax £60 total UK income?