Money in EU: leave it or move to UK?

Lungboy

It's a bit of a long shot but I'm hoping someone here might know a bit about European banking.

My wife has ~35k in Euros in the Netherlands (she's Dutch) due to a trust fund thinger maturing when she got to 30. In the Netherlands, any savings over approx. 21k euros gets taxed at 1.2%. The very highest savings accounts pay barely over that, and require an awful lot more than she has to get the top rate anyway. So, is it worth transferring the lot to the UK, or just enough to get her under the tax level? I know the exchange rate is miserable at the moment, but it seems silly to leave it.

ermine

You don't necessarily have to convert the euros to £ if you don't want to - you can get euro denominated bank accounts in the UK - Google is your friend

Alternatively she could open a bank account in Germany where they use Euros natively. I believe there is some EU regulation where banks have to grass you up to your national tax authority so it depends on how this Dutch tax works - if it's only on Dutch accounts and assuming the Germans don't have the equivalent she'd be okay even in the German bank does rat her out to the Dutch tax people.

Lungboy

She's a non-resident national, so the only stuff the Dutch authorities care about is income earned or residing within the Netherlands. Would she not need a German address to open a German account? A Euro based account that earnt decent interest would definitely be preferable if it was easy to sort.

Keep_pedalling

The exchange rate may be miserable, but it could get worse and if you have no plans to move to Holland i think it would be better to transfer those funds to the UK, and invest as appropriate for your financial situation.

Lungboy

I can see us leaving the UK in the middle future, but not for 5 years at least.

From a quick Google, there are several German banks that will let her open an account online with a UK address. Sadly, their interest rates are terrible. UK Euro accounts all seem to have high fees/balance requirements and still pay little interest.

Keep_pedalling

You have far better options in the UK, high interest current accounts, P2P accounts, S&S NISAs that the cost of conversion to Stirling ought to be offset pretty quickly.

[Deleted User]

Why not convert all the Euros into physical gold? Then you can sell it when you need it. If the OP buys Gold Britannia, there's no capital gain tax in UK.

ermine

You could transfer and use currency options to hedge the difference, though five years is probably a long time. And forex is really, really scary.

How about Ireland? Nationwide will offer her 1.3% gross. Maybe others will do better - hopefully they run banking a a more anglo-saxon way that Continental Europe with their charges.

To qualify whether to transfer or not you need to bottom out first where you anticipate spending this money. If in Euros, then it's probably best to keep it in Euros, as two lots of transfer costs will be a big hit, though nowhere near as much as the massive currency risk - the starting point of the current state of the £ and euro aren't in your favour. Yes there's the issue of Grexit, but now there's an issue of Brexit too

Keep_pedalling

ciaccino wrote: »

Why not convert all the Euros into physical gold? Then you can sell it when you need it. If the OP buys Gold Britannia, there's no capital gain tax in UK.

Or Bitcoins, what could possibly go wrong ?

Lungboy

Thanks for the suggestions all. The exchange rate is getting even worse for shifting the cash to the UK, so I don't think she's keen to do that. A German bank account may well be the way to go, although the interest rates in Europe are incredibly bad at the moment.

We were wondering whether it might be worth buying a (very) small property in Germany as an investment. Small flats in good condition with tenants in place can be had for close to her budget so no mortgage would be necessary, so in theory the yield should easily outstrip a German savings account. Is it a crazy idea?

Archi_Bald

Lungboy wrote: »

Is it a crazy idea?

In a word - yes. Unless you are experienced in the business of BTL, and in running a business abroad.