£100,000 how best to invest

rolls24

hi, any help on the best ways to invest £100,000 to avoid taxes, about me, i semi live in BANGKOK, i have a UK postal address, i bank with the HALIFAX, i was thinking £30,000 in bonds ? the max in an ISA is it £15,000 ? that leaves me about £50,000 to lose, if the poo hits the fan i can be back in the UK within 12 hours, i have to keep about £14,000 in my Bangkok bank account so no probs there. thanks KC

bowlhead99

rolls24 wrote: »

hi, any help on the best ways to invest £100,000 to avoid taxes, about me, i semi live in BANGKOK, i have a UK postal address,

Are you a UK tax resident or not? Which is nothing to do with whether you have an address in the UK where you can receive post. It can be more related to where you spend your time.

i bank with the HALIFAX, i was thinking £30,000 in bonds ?

You mean Halifax savings bonds which are taxable? Or NS&I premium bonds which are paid free of UK tax? I am guessing you mean the Halifax ones, because it's mentioned in the same sentence, but you haven't told us anything about your goals other than to save tax, so maybe you mean the NS&I ones?

the max in an ISA is it £15,000 ?

If you are not a UK tax resident, you can not get an ISA.

If you are investing maximum £100k in low risk investments in the UK, your income from it is not likely to exceed your £10.6k UK personal allowance which you will have as a UK citizen. Hence, not being able to access an ISA does not matter unless you have lots of other UK income, which you might not if you (semi) live in Bangkok.

If you do qualify to have an ISA, the maximum you can contribute to one is £15240 in a UK tax year. You will avoid UK taxes on income generated in it, but if you are Thai tax resident you will be paying tax on whatever worldwide income you bring in to Thailand and so using an ISA will not avoid Thai tax (if for some reason you bring the proceeds into Thailand when you earn them).

that leaves me about £50,000 to lose,

Is the goal to risk losing the £50,000 in the hope of making large gains on it (5-10% a year)?

Or to keep it safe from investment risk, and only make 1-2% a year, which may or may not keep pace with the rate of inflation in UK (or more importantly, in Thailand if that is were you 'semi live' and intend to retire).

There are tens of thousands of investment combinations that a person could use. We have no idea of your needs or goals.

If the goal is to make a larger amount of money tax efficiently (avoid UK income taxes), you could consider stock market investment funds which generate a low level of income but hopefully a higher level of capital gains. Of course, this comes with risk. Whether it is effective for tax planning depends on whether you are UK tax resident and what tax band you are in. If you're UK resident you will be paying UK tax on all your worldwide income. If you are not UK resident, HMRC will only want tax on your UK income, which as mentioned above might be covered by the personal allowance depending on how much of it you have.

if the poo hits the fan i can be back in the UK within 12 hours, i have to keep about £14,000 in my Bangkok bank account so no probs there. thanks KC

If by the poo hitting the fan you mean an investment losing money, or a bank going bust when you have more in it than the £85k limit for the financial services industry compensation scheme, it probably doesn't make a difference whether you are physically in the UK 12 hours later or 12 days later.

Paulrm71

If you are required to keep 14k in Thailand, I suspect that you hold a Thai retirement visa, which would suggest that you are no longer a UK resident?

rolls24

yes you are correct in that. i am on a retirement visa , but i pay british taxes on my pensions, so how best do you suggest i overcome this, i may have to return to the uk in the future and buy property there, it is no good having savings in thailand, as there are many stories if something should happen to me, of people next if kin being unable to transfer monies, and transfer monies out, there is one such case now that has gone on for 2 years and eaten up lots of capital in solicitors fees etc.i just want to safe guard my money.

bowlhead99

Ok, so if you are not a uk resident, you can't have an ISA.

You will also not qualify for the most popular "high interest current accounts" which are a good choice for those who are resident here.

And if you are drawing UK pensions with total UK income over £15,600 a year, you'll be paying tax on some or all of your savings interest because you're over the limit to get it at 0% tax.

If you are looking for complete safety rather than taking investment risk for the largest returns, you can't beat NS&I and could put all the money which you don't want to hold in your current account, with them.

If you are old enough, the over-65 fixed term bonds have great rates, for £20k max. These are taxable.

A further £40k may be held in premium bonds, where the interest rate averages out to 1.35% per year, which is tax free, although the prize money is gambled for you and the average 1.35% assumes that at some point you will win the jackpot (which with the max investment should happen once every hundred thousand years).

The remainder could go in normal monthly income bonds, paying a taxable 1.26% a year.

I think all of those products can be held by overseas investors, although you do need to have a UK bank account to use some of them, which you do.

Only the over-65 bonds which pay the special high rate are likely to beat inflation, so if you're wanting to put the money away long term, and not looking to buy a property with it in the next few years, you could probably consider investment funds for a portion of it.

Paulrm71

what about offshore accounts with reputable (fairly) banks such as HSBC bowlhead? Wouldn't the OP be able to investvia these?

Jonbvn

Paulrm71 wrote: »

what about offshore accounts with reputable (fairly) banks such as HSBC bowlhead? Wouldn't the OP be able to investvia these?

He can. However, the rates on offer are even lower than the equivalent onshore rates, which are already very low.

bowlhead99

Yes, OP could get an account with HSBC or e.g. Lloyds international or Nationwide International or whoever offshore. I use Lloyds but rates are low as you say. Nationwide will give over a percent but only including an intro bonus rate and only over £25k. They do have a fixed rate bond if you want to lock up for 3 years but not as lucrative for retirees as the over 65 ns&i ones.

I hadn't mentioned offshore accounts because it wasn't initially obvious what the OP's tax status was, or that they had enough UK income to use up the UK personal allowance (which they still haven't confirmed either way).