How to move money without loosing interest?

xylophone

he is not allowed to have an ISA whilst abroad.

Not exactly- see https://www.gov.uk/individual-savings-accounts/if-you-move-abroad-or-die

Pincher

Probably easiest to buy a fixed rate bond and register for gross interest. Higher interest for a five year bond than ISA any way.

CLN

Wow this is getting more and more complicated... I don't see why the reasons are important but if people MUST know, I have been saving the money for him for a while to give him when I feel he needs it, while he doesn't actually need the money right now he needs to show money in his name for visa applications. BUT I would rather keep the money in the UK for now as it costs/wastes money moving from country to country when there is a chance he might not stay abroad.

Regarding the ISA, he is officially registered as living at my address, I don't get what officially is considered "resident in the UK", but on paper he is still living with me as far as I know. But I guess putting the money into his ISA without him being here would be difficult. Anyway, the only way I know is to transfer the money to his current account, but I'm worried I would loose a lot of the money on fees and interest by doing that no? Is there any other way?

polymaff

CLN wrote: »

Ok sorry I will try to give more information. The amount is £3,000-£10,000 depending on how much the fees or interest I will loose is. The account I want to move it to if possible would be a Cash Isa with Santander, the person is my son and we have the same last name. My accounts are also with Santander.

I will change the question a little though. I actually don't need to MOVE the money exactly. I need to have the money in an account in his name, if this can be done without moving the money that would be fine also.

So you want to give your son a few thousand and you're hoping that he'll put it in an ISA.

Is your son a UK resident for tax purposes? See:

https://www.moneyadviceservice.org.uk/en/articles/cash-isas

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt

If he meets the requirements then the ISA can be opened by him in his sole name. You'd then give him the gift by bank transfer to that account.

TCA

CLN wrote: »

Anyway, the only way I know is to transfer the money to his current account, but I'm worried I would loose a lot of the money on fees and interest by doing that no? Is there any other way?

We don't know what kind of account you've got (i.e. will be transferring the money from), so what kind of fees are you talking about? Or do you mean fees for international transfers?

To make a crude interpretation of residency rules, if he's been living abroad for six months or more, he's *probably not* UK resident. There's no such thing as "officially registered" at an address. He may be able to open a UK savings account using correspondence to your house as proof of address or maybe he's even still on the electoral there, but many UK banks will require him to declare he's UK resident on application. You might get away with that but it would be his call as to whether to lie in the application or not. There are banks however who will accept non-UK residents, but maybe not that many will for their normal savings products, and they'll steer you to offshore accounts generally paying minimal interest.

Opening an ISA if he's not resident (and not subject to any of the exceptions in the links given above) would breach the ISA rules.

CLN

TCA wrote: »

We don't know what kind of account you've got (i.e. will be transferring the money from), so what kind of fees are you talking about? Or do you mean fees for international transfers?

To make a crude interpretation of residency rules, if he's been living abroad for six months or more, he's *probably not* UK resident. There's no such thing as "officially registered" at an address. He may be able to open a UK savings account using correspondence to your house as proof of address or maybe he's even still on the electoral there, but many UK banks will require him to declare he's UK resident on application. You might get away with that but it would be his call as to whether to lie in the application or not. There are banks however who will accept non-UK residents, but maybe not that many will for their normal savings products, and they'll steer you to offshore accounts generally paying minimal interest.

Opening an ISA if he's not resident (and not subject to any of the exceptions in the links given above) would breach the ISA rules.

Well until recently he was not a resident anywhere, he spent most of the last few years travelling. He was not in the UK but technically that was the address he gave for anything, he receives mail here and so on.

What would happen if he broke the ISA rules exactly?

TCA

CLN wrote: »

What would happen if he broke the ISA rules exactly?

I've got no idea. I think if someone oversubscribed to an ISA in a given tax year or opened too many ISAs by mistake (while resident), then I doubt there would much ramifications other than monies returned, some tax payable and a rap on the knuckles. As for intentionally opening an ISA while non-resident, I don't know.

In reality, if your son can produce the necessary documents to open an ISA successfully and hasn't told HMRC that he's left the country, then it might not be picked up at all. But I'm not saying that's a good reason to do it and I don't know what the penalties are if caught out.

All that aside, cash ISA rates are rubbish, so it's not worth it anyway if you're just thinking about earning interest.