Investing Inheritance as a non UK resident

campogirl

I have recently inherited a large amount of money (£) which I would like to invest.   However, I am now classed as a non UK resident after living abroad for 14 years and would like to know if I am able to keep my money in the UK to invest and if so where would be the best place to invest.  
I have a Uk bank account, and receive a uk salary however I have no property but use a uk address to receive correspondence.
any advice appreciated.

thank you

blenz101

You should be able to find someone who will offer a general investment account (GIA) as a non-resident.  You won't be eligible for an ISA or any other tax shelter for the money.

You could look at something like swissquote depending on where you are now living.  Popular with expats.

masonic

As a non-UK resident (and presumably intending to remain where you are), now might be the time to look into local investment accounts. As a non-resident, there isn't a material difference in using investment vehicles listed outside the UK.

bostonerimus

I agree that you should be looking for local investment accounts.

If you don’t already have a UK investment account and want to keep the money in the UK it’s probably easiest to talk to your UK bank as without UK residency it won’t be trivial to set up an investment account.

What are you doing wrt pensions etc right now? as using the inheritance to increase contributions to that might be good use of the money.

blenz101

masonic said:

As a non-resident, there isn't a material difference in using investment vehicles listed outside the UK.

Well taking £30k out of GBP into another currency is pretty material depending on the currency, those pegged to the USD are particularly strong right now due to the well reported global issues.

The UK is highly competitive in terms of platform fees and funds.  As an example buying the equivalent of the HSBC Global Strategy funds via an HSBC expat account or HSBC UAE will incur upfront % charges on purchase, typically higher platform fees and higher ongoing charges than the funds available to UK investors.

Investing the money outside the UK removes any potential UK tax implications provided the poster remains non-resident but all citizens retain their c.12k personal allowance in any event so on £30k this isn't likely to be an issue even in a GIA.

masonic

blenz101 said:

masonic said:

As a non-resident, there isn't a material difference in using investment vehicles listed outside the UK.

Well taking £30k out of GBP into another currency is pretty material depending on the currency, those pegged to the USD are particularly strong right now due to the well reported global issues.

The UK is highly competitive in terms of platform fees and funds.  As an example buying the equivalent of the HSBC Global Strategy funds via an HSBC expat account or HSBC UAE will incur upfront % charges on purchase, typically higher platform fees and higher ongoing charges than the funds available to UK investors.

Investing the money outside the UK removes any potential UK tax implications provided the poster remains non-resident but all citizens retain their c.12k personal allowance in any event so on £30k this isn't likely to be an issue even in a GIA.

One doesn't take money out of one currency into another if one invests in assets. Equities are not pegged to a particular currency if they sell goods and services globally. The UK is far from competitive on fees if looking globally, but UK investors have better regulatory protection when using UK financial instruments. Even then, many opt for US listed financial instruments.

The UK personal allowance is irrelevant if one's tax domicile is outside the UK.

EdSwippet

campogirl said:

... I am now classed as a non UK resident after living abroad for 14 years and would like to know if I am able to keep my money in the UK to invest and if so where would be the best place to invest.

In which country are you resident? Some, for example the US, have punitive local tax rules for 'offshore' (to them) investment holdings.

blenz101

masonic said:

The UK personal allowance is irrelevant if one's tax domicile is outside the UK.

Well it is, because even as a non-resident income earned in the UK will be subject to income / CGT tax if it exceeds the personal allowance threshold. Expats do retain their personal allowance.

Currency is going to be a factor if you are suggesting to find a platform outside of the UK.  In my experience GBP is not generally offered and payments into your trading / investment account will be converted to USD/EUR/CHF etc.  Often these rates are not competitive so an exchange house is also required to move the money to a non-UK trading platform.

US listed financial instruments have US tax implications, withholding and estate tax being well know.  Typically non-residents would seek funds listed elsewhere, my Vanguard funds are all Irish domiciled for just this reason.

And to pick up on the pensions point you can only pay into a UK pension £2400 per year as a non-resident and only for six years after becoming non-resident so this won't apply to the original poster.

So the simplest and cheapest way to invest this money will be in a UK GIA if this option is available.

masonic

blenz101 said:

masonic said:

The UK personal allowance is irrelevant if one's tax domicile is outside the UK.

Well it is, because even as a non-resident income earned in the UK will be subject to income / CGT tax if it exceeds the personal allowance threshold. Expats do retain their personal allowance.

It's irrelevant precisely because it isn't income earned in the UK if the individual is not UK domiciled and neither is the financial instrument.

blenz101 said:

Currency is going to be a factor if you are suggesting to find a platform outside of the UK.  In my experience GBP is not generally offered and payments into your trading / investment account will be converted to USD/EUR/CHF etc.  Often these rates are not competitive so an exchange house is also required to move the money to a non-UK trading platform.

Home currency would not need to be converted to GBP in the first place. Assets such as equity investments are exposed to the currencies in which the company does business, and even then only to the extent that they contract in said currency.

blenz101 said:

And to pick up on the pensions point you can only pay into a UK pension £2400 per year as a non-resident and only for six years after becoming non-resident so this won't apply to the original poster.

Happy to concede that this is irrelevant to the OP.

blenz101

I am saying that the best course of action by far to invest £30k GBP is to keep that in GBP and invest it in a UK GBP GIA.  Tax is a consideration if doing this as any income or capital gains will still be subject to UK tax even for a non-resident.  However, the personal allowance still applies and unless withdrawing over £12k of profit a year is not going to be an issue.  I agree if you move the money out of the UK then UK tax is no longer a consideration (but local taxes may well come into play).

I'm not sure what you don't understand about currency conversion if your advice to seek out a non-UK platform is taken in their current country of residence.  The money is currently in GBP, it was an inheritance in GBP.  Hopefully the OP will come back and confirm where they are based but say they are living say in Spain and seek a local platform, they will almost certainly need to convert that £30k to EUR as their trading / investment account will be in that currency.  If they are in the UAE then they will have to move it to USD or Dirhams.  And so on...   The only place using GBP as a home currency, for practical purposes, is the UK.

masonic

blenz101 said:

I am saying that the best course of action by far to invest £30k GBP is to keep that in GBP and invest it in a UK GBP GIA.  Tax is a consideration if doing this as any income of capital gains will still be subject to UK tax even for a non-resident.  However, the personal allowance still applies and unless withdrawing over £12k of profit a year is not going to be an issue.  I agree if you move the money out of the UK then UK tax is no longer a consideration (but local taxes may well come into play).

As an immigrant of another country, they'll be subject to the prevailing tax rules of both territories. Converting from one currency to another won't change that. I don't think you are correct that anyone investing money in UK financial instruments is exempt from paying taxes on this income outside the UK. I have investments domiciled in Ireland, Luxemburg, USA etc, and all are subject to UK CGT and income tax. US resident aliens would be another good example of those who would have to pay US taxes on UK income. The UK is not alone in having tax privileged accounts, but such designations may not cross international borders. A sum of £30k (I assume you know the OP personally to have confirmed this amount) is a sum that can be managed efficiently for tax purposes.

blenz101 said:

I'm not sure what you don't understand about currency conversion if your advice to seek out a non-UK platform is taken in their current country of residence.  The money is currently in GBP, it was an inheritance in GBP.  Hopefully the OP will come back and confirm where they are based but say they are living say in Spain and seek a local platform, they will almost certainly need to convert that £30k to EUR as their trading / investment account will be in that currency.  If they are in the UAE then they will have to move it to USD or Dirhams.  And so on...   The only place using GBP as a home currency, for practical purposes, is the UK.

What I don't understand is why someone who has lived outside the UK for 14 years would want to cling on to a financial services market they no longer have ties with (and would not be permitted to start new business with), when it is likely they have more local services that are likely more convenient.