Suggestions - Returning from overseas

desrover

Have been working in Asia for ten years and will be returning to the UK this summer. I have accumulated some savings which have been transferred to my UK accounts which I have been able to maintain while I have been away.

For the tax year 2023-2024 I estimate that I could receive around £15000 in interest (based on current instant savings rates) which will be taxable as I am unable to open any ISAs currently. I will also be earning a small amount - probably around £6000 and I have been receiving around £2000 per annum in dividends for shares that I have held for a number of years. Could anyone approximately estimate the tax that will be due in 2023-2024 based on those figures please? I am aware the personal allowance is £12570 but I am not sure about other allowances for my situation. I also know that I will have to complete a self-assessment if my interest is over £10000.

I am considering investing most of the unsheltered savings when I return, or to use a range of fixed interest savings or a combination of the two. I have a house with no mortgage so I am looking at ways to maximise my income as I do not intend to increase my earnings but this may change due to cost of living pressures. If anyone has any general advice or experience of this situation then I would welcome any further suggestions. I will be 52 when I return and I have been paying National Insurance contributions while overseas. Thanks for your help.

xylophone

See

https://www.gov.uk/apply-tax-free-interest-on-savings

https://www.gov.uk/tax-on-dividends

https://www.litrg.org.uk/tax-guides/savers-property-owners-and-other-tax-issues/savings-and-tax

But note that dividend allowance reduces to £1000 from 6/4/23.

Personal Allowance remains the same at £12,570.

Starter Rate for Savings (£5000) and Personal Savings Allowance (£1000 (Basic Rate)/£500 (Higher Rate) remain the same.


Presumably you will be using your ISA allowance in  full once you return to the UK?

https://www.gov.uk/individual-savings-accounts

And check your state pension forecast

https://www.gov.uk/check-state-pension

And consider opening a Personal Pension?

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

desrover

Many thanks for your help and the links xylophone. Yes I have checked my state pension and I will need 4 more years to gain the full amount.

One issue I have is that I will have a decent amount of savings but will only be able to place £20000 in the first financial year leaving the rest unsheltered. I am trying to work out the best place(s) for the money but there appear to be lower thresholds being introduced for CGT and dividends. As I will be a low earner I will not be able to place much into a pension also. 

Does anyone else have any other suggestions please as I do not want to leave much money in unsheltered savings accounts?

Pat38493

One option would be to live off your savings and put almost your entire income into a pension - that way you can get it into a tax advantaged place quicker.  

xylophone

https://forums.moneysavingexpert.com/discussion/comment/56284341#Comment_56284341

Do you have a deferred pension in TPS? If so, is NRA 60?

If you are planning to earn only around £6000  per tax year,  presumably you will be using part of  your savings in day to day living expenses.

If the £6000 is relevant earnings, you can contribute a net £4800 to a personal pension - the provider will claim TR of £1,200 and add it to the pension.

You will use your ISA allowance.

That's about it really in terms of tax shelters?

artyboy

xylophone said:

https://forums.moneysavingexpert.com/discussion/comment/56284341#Comment_56284341

Do you have a deferred pension in TPS? If so, is NRA 60?

If you are planning to earn only around £6000  per tax year,  presumably you will be using part of  your savings in day to day living expenses.

If the £6000 is relevant earnings, you can contribute a net £4800 to a personal pension - the provider will claim TR of £1,200 and add it to the pension.

You will use your ISA allowance.

That's about it really in terms of tax shelters?

Another 50k into premium bonds?

xylophone

Another 50k into premium bonds?

I had considered that but modest winnings just enable him to spend and keep his savings earning taxable interest - if he had a big win, the money would need to go somewhere and other than paying it into a non interest bearing account, would just compound his problems?

Mind you, with the really big win he could give up the day job and emigrate to a tax haven.....

desrover

xylophone said:

https://forums.moneysavingexpert.com/discussion/comment/56284341#Comment_56284341

Do you have a deferred pension in TPS? If so, is NRA 60?

If you are planning to earn only around £6000  per tax year,  presumably you will be using part of  your savings in day to day living expenses.

If the £6000 is relevant earnings, you can contribute a net £4800 to a personal pension - the provider will claim TR of £1,200 and add it to the pension.

You will use your ISA allowance.

That's about it really in terms of tax shelters?

Thanks again for the suggestions xylophone. Yes I should have mentioned my deferred pension in TPS. I should get that at 60 by which time I hope to have some of the savings put into ISAs. The pension is not enough to live on comfortably on its own but would take the pressure off the constant drawdown from savings. 

I will certainly look to add to a personal pension when I can. This will be started from scratch. I will need to look into which pension providers are happy to open an account for what will probably be a relatively small amount. 

Hope there are no major changes to ISAs/Pension contributions in the next few years. I think I can open an ISA or a pension as soon as I return to the UK but I will need to check this.

xylophone

The small amount into a pension should be no problem.

 Even if you have no relevant earnings, you can contribute up to £2880 to a personal pension and the provider will claim tax relief of up to £720 and add it to the pension.

For modest amounts Hargreaves Lansdown might suit - it is easy to open the SIPP and perhaps you might consider a global multi asset fund?

https://monevator.com/low-cost-index-trackers/

https://monevator.com/best-global-tracker-funds/

Albermarle

Hope there are no major changes to ISAs/Pension contributions in the next few years.

I would not bank on that, especially where pensions are concerned .....

desrover

xylophone said:

The small amount into a pension should be no problem.

 Even if you have no relevant earnings, you can contribute up to £2880 to a personal pension and the provider will claim tax relief of up to £720 and add it to the pension.

For modest amounts Hargreaves Lansdown might suit - it is easy to open the SIPP and perhaps you might consider a global multi asset fund?

https://monevator.com/low-cost-index-trackers/

https://monevator.com/best-global-tracker-funds/

Thanks again for your suggestions. Did you recommend HL because they have a good reputation for managing small amounts or are their fees at the lower end for smaller sums? Trackers would be my choice with the current stock market volatility.