Save money abroad

mok95

Hi there,

I have a full time job in the UK, but I was born in Spain. I have a spanish passport. Speaking to a spanish banker, he said I would be able to open a "non-resident" account in Spain, which would be tax exempt.

If I made any investments there, I wouldn't need to share the profits with the government.

What he was unable to tell me is if I would need to declare any profits I made in Spain in the UK on my tax declaration, or if I would be taxed when I tried to transfer the money back into the UK.

Does anyone know what the legislation is?

Thanks in advance.

missile

Anyone can open a non-resident bank account in Spain. If you are a UK tax payer, your savings are tax exempt in Spain but you are required to declare any income on your UK tax return. You friend ought to have told you about the reciprocal agreements whereby spanish banks are required to pass info to UK.

PS: I doubt you will find any spanish bank paying better rate than their UK equivalent. If you find one, let me know

missile

Another thing to consider is the cost of currency exchange. You could loose circa 5% on transfering £ to € and a similar ammount when you transfer back again. You would do better utilising your ISA allowance.

Cook_County

As you are domiciled in Spain you can claim the remittance basis and pay no UK tax in income credited up to April 2008.

After that date you can continue to pay no UK tax if the income is below £1,000 a year or, alternatively, by paying the UK government a fixed fee of £30,000 per year.

missile

I think the OP is domiciled in UK and paying UK tax? If he was domiciled in Spain he would not be able to have a "non-resident" account.

Yet another thing to consider is most spanish banks levy charges on these accounts, which would further erode the interest paid.

Jolly_Roger_4

Anyone can open a non-resident bank account in Spain. If you are a UK tax payer, your savings are tax exempt in Spain

Does the same go for opening a non-resident bank account in England when I live in Germany?
The interest rates average at 3,5% in Germany, and the transfer only costs me 8 pounds regardless of the transfer sum. Also if I keep an eye on the exchange rate, which regularly fluctuates, I can easily earn the 8 pounds back, with interest, by returning the money at the right time.

missile

I really do not know the rules regarding non-resident accounts in the UK, but it must be worth a phone call?

If you are domiciled in Germany you ought to declare your income from savings in the UK, but you would need a UK address.

Cook_County

missile wrote: »

I think the OP is domiciled in UK and paying UK tax? If he was domiciled in Spain he would not be able to have a "non-resident" account.

Yet another thing to consider is most spanish banks levy charges on these accounts, which would further erode the interest paid.

missile - you are4 confused. The OP is RESIDENT in the UK but DOMICILED (for UK tax purposes) in his domicile of origin, the Kingdom of Spain.

Cook_County

missile wrote: »

I really do not know the rules regarding non-resident accounts in the UK, but it must be worth a phone call?

If you are domiciled in Germany you ought to declare your income from savings in the UK, but you would need a UK address.

missile - you are confused. The OP is RESIDENT in Germany (and subject to tax on worldwide income there) but DOMICILED for UK tax purposes within the UK (his domicile of origin).

There is no reason why Jolly Roger cannot have an account in the UK if he so wishes...

missile

Cook_County wrote: »

missile - you are4 confused. The OP is RESIDENT in the UK but DOMICILED (for UK tax purposes) in his domicile of origin, the Kingdom of Spain.

I think it you who might be confused, where does he OP say he is domiciled in Spain?

missile

Cook_County wrote: »

missile - you are confused. The OP is RESIDENT in Germany (and subject to tax on worldwide income there) but DOMICILED for UK tax purposes within the UK (his domicile of origin).

There is no reason why Jolly Roger cannot have an account in the UK if he so wishes...

I think you are confused. If OP has no UK address, he will find it hard to open a UK bank account.