What to do with 300k

hiplexa

I have 300k that I want to move to the UK. I am not currently a UK tax resident, but will be coming back in a couple of years. At that point I will use the money to buy a property.

What is the best way to preserve the value of this over these two years? Most savings accounts offer pitifully low rates and the ones that have better offers only apply to a fraction of this sum of money. I don’t want to be eaten by inflation. I also don’t want this to be subject to any tax in the period before I move back.

Any advice please?

eskbanker

hiplexa wrote: »

I am not currently a UK tax resident, but will be coming back in a couple of years.

Where do you actually live? The vast majority of UK accounts offering interest are only available to UK residents (when opening) but some, such as NS&I, will allow non-residents to apply: https://www.nsandi.com/i-live-outside-uk-can-i-invest-with-nsi

hiplexa wrote: »

I also don’t want this to be subject to any tax in the period before I move back.

What is the tax regime where you currently are? UK tax shelters such as ISAs, apart from not being available to non-residents (and only accepting £20K per tax year), don't shelter the holder from tax elsewhere....

Any reason why you don't save the money wherever you currently live, for now?

Terry_Towelling

If you intend to use the cash to buy a house, general inflation is irrelevant. House price inflation will be your enemy. I hear in the news that house prices have stagnated in certain areas of the country, and the Brexit scaremongers are predicting falls of between 6% & 20% in house prices post Brexit - depending on the manner in which we exit.

Frankly any sort of exit is looking unlikely due to the blocking tactics of our politicians and the 'traps' the EU are likely to insist be part of any negotiated deal. E.g. The Irish Backstop, which the EU knew would be just as unacceptable to Parliament as a No Deal Brexit.

Linton

For a large amount such as £300K and a very short time period such as 2 years you are not going to get any better return than that from savings accounts without taking on the risk of losing money. Your best bet could be NS&I which is 100% guaranteed by the government for any amount of money.

AnotherJoe

hiplexa wrote: »

IAny advice please?

Yes, state where you currently live, and what the tax regime is.

bostonerimus

Put the money in an easy access saving account where you currently live. When you move back to the UK just transfer it to a UK bank account and then use it to buy your house.

hiplexa

I currently live in Hong Kong. No tax payable on overseas income. Most of my savings here are in GBP already. I am considering moving it out of here due to civil unrest which is only getting worse and the government cannot be trusted not to do anything crazy.

As an aside, I was hoping to take advantage of a weakened housing market in the UK given Brexit, but that’s another story. Unfortunately it’s not feasible to buy property there just now as I don’t yet know what part of the UK my job will take me back to.

worried_jim

hiplexa wrote: »

I currently live in Hong Kong. No tax payable on overseas income. Most of my savings here are in GBP already. I am considering moving it out of here due to civil unrest which is only getting worse and the government cannot be trusted not to do anything crazy.

As an aside, I was hoping to take advantage of a weakened housing market in the UK given Brexit, but that’s another story. Unfortunately it’s not feasible to buy property there just now as I don’t yet know what part of the UK my job will take me back to.

Can you not move into US Dollars or another stable currency?

DairyQueen

hiplexa wrote: »

I currently live in Hong Kong. No tax payable on overseas income. Most of my savings here are in GBP already. I am considering moving it out of here due to civil unrest which is only getting worse and the government cannot be trusted not to do anything crazy.

As an aside, I was hoping to take advantage of a weakened housing market in the UK given Brexit, but that’s another story. Unfortunately it’s not feasible to buy property there just now as I don’t yet know what part of the UK my job will take me back to.

In the overall scheme it superficially seems that investing in UK property now is the lesser risk. Consider buying regardless of location. If you pay no tax on overseas income in HK then you won't be subject to the current clampdown on BTL income. That property could be sold when you know your UK destination. CGT may apply to any gains depending on your history of residence/non-residence but, for you, this may be a cost worth paying.

The Brexit impact on market sentiment is temporary. Nobody knows when the market will recommence its upward trajectory but history suggests that it will. I have yet to meet anyone who, regardless of timing, regretted buying their home but have met plenty who regretted not doing so, or delayed doing so.

hiplexa

I earn in HKD which is pegged to USD, and have bought GBP at increasingly good value as GBP has weakened. Would not make any sense to convert back to USD. It’s not the currency that is the issue as that has been in my favour and my bank account here allows me to have multiple currencies in it including GBP. Only a transfer fee would apply when the time comes.

hiplexa

Sorry I can’t get the quote function to work.

DairyQueen - interesting perspective but I would still have to foot a tax bill for SDLT/LBTT which would be hefty for what might only be a 2 year stint of ownership. To make this worthwhile the capital gain would have to exceed the SDLT/LBTT which is not guaranteed at all. In fact it could easily go the other way. BTL is also a lot of hassle from afar, and I would soon accrue significant expenses flying back and forth to search properties, complete the transaction etc.

So it’s a case of NS&I and/or any other account that allows non-tax residents to apply? I understand that ISAs are out of the question. Am I liable to pay UK tax on savings as a non-tax resident?