Moving Abroad - where to invest house sale?

haychq

Newbie here - any help appreciated.

I’m planning to move to Middle East before the end of year. I’ve sold my house and currently sat on £300K that I want to park in decent return investments.

I don’t really have a big investment pot already as I focused on becoming mortgage free first - £20K in emergency fund, £40K in Pension, £10K in crypto etc.

This is what I was thinking to do:

• Buy a ready to rent house - hand over to letting agent - £130K (in a ltd company)
• Buy another BTL on mortgage - £40K deposit (in a ltd company)
• We don’t currently have S&S ISA, so before I move, invest in that. I know I can’t contribute once I become a tax non resident - £40K (for wife & I)
• Open a GIA - invest the rest in index funds

Reasons:

1. I’m quite risk averse, so would prefer some bricks and mortar even though they maybe a headache. 
2. Houses would be in limited company to avoid any major CGT overhauls by the current government.
3. In line with my faith, I don’t want to invest in interest bearing accounts, so no bonds, high interest saving accts etc. (mortgage would be faith based finance)
4. Whilst I’m a non resident, I’ll be CGT exempt so investing in GIA should be protected.
5. I’m a high earner and with no tax in my new salary, I should be able to top up the above regularly.
6. I know I won’t have a primary residence and that’s okay for the next 5-10 years.

Help required:

1. Does the above seem reasonable?
2. Would you change the asset allocation and why?
3. I’m not sure about what to do with my pension, I recently had someone from SJP discuss options of moving the funds to them. The fees seemed too high, so I left it.
4. I can’t top up in SIPP whilst abroad, would you just move it to a SIPP and leave it?

Thanks for the help!

Hoenir

 haychq said:

1. 
   
   
2. Houses would be in limited company to avoid any major CGT overhauls by the current government.

Any gain will remain taxable and will be subject to any current legislation. 

Emmia

haychq said:

Newbie here - any help appreciated.

I’m planning to move to Middle East before the end of year. I’ve sold my house and currently sat on £300K that I want to park in decent return investments.

I don’t really have a big investment pot already as I focused on becoming mortgage free first - £20K in emergency fund, £40K in Pension, £10K in crypto etc.

This is what I was thinking to do:

• Buy a ready to rent house - hand over to letting agent - £130K (in a ltd company)
• Buy another BTL on mortgage - £40K deposit (in a ltd company)
• We don’t currently have S&S ISA, so before I move, invest in that. I know I can’t contribute once I become a tax non resident - £40K (for wife & I)
• Open a GIA - invest the rest in index funds

Reasons:

1. I’m quite risk averse, so would prefer some bricks and mortar even though they maybe a headache. 
2. Houses would be in limited company to avoid any major CGT overhauls by the current government.
3. In line with my faith, I don’t want to invest in interest bearing accounts, so no bonds, high interest saving accts etc. (mortgage would be faith based finance)
4. Whilst I’m a non resident, I’ll be CGT exempt so investing in GIA should be protected.
5. I’m a high earner and with no tax in my new salary, I should be able to top up the above regularly.
6. I know I won’t have a primary residence and that’s okay for the next 5-10 years.

Help required:

1. Does the above seem reasonable?
2. Would you change the asset allocation and why?
3. I’m not sure about what to do with my pension, I recently had someone from SJP discuss options of moving the funds to them. The fees seemed too high, so I left it.
4. I can’t top up in SIPP whilst abroad, would you just move it to a SIPP and leave it?

Thanks for the help!

You're "risk averse" but have £10k in crypto?!

I'm moderately risk averse, and hold zero crypto, it's essentially built on almost nothing and can gain and lose value very quickly - although it doesn't do so with guaranteed "interest" so, perhaps a fair choice for religious reasons...

The issue with bricks and mortar, is that even if you use a management company, you are still the person responsible for ensuring that all the legal requirements are being adhered to, so things like rental deposit, gas and other safety inspections etc.

The S&S ISA (depending on which provider you use, and the risk level attached to it), is likely to involve a proportion of the assets being in bonds of some sort, or held as cash in interest bearing accounts (although not directly by you) does that create a problem for your faith?

Edit: As an example I have an S&S ISA with Moneybox which includes a small amount of cash (less than 1%) which states it is interest bearing (although I can't immediately see at what rate) and around 1/6th of the holding is in "Overseas Corporate Bonds".

My understanding is that SJP is expensive for what it is (which is possibly why they're having a few difficulties, as reported in the FT and other press outlets) so I wouldn't go for it myself, but there are lots of SIPP providers out there. SIPPs aren't something I have much knowledge of, so I can't advise but there are others with lots of knowledge.

haychq

Hoenir said:

 haychq said:

1. 
   
   
2. Houses would be in limited company to avoid any major CGT overhauls by the current government.

Any gain will remain taxable and will be subject to any current legislation. 

Correct - it’ll be corporate tax! 

haychq

Emmia said:

haychq said:

Newbie here - any help appreciated.

I’m planning to move to Middle East before the end of year. I’ve sold my house and currently sat on £300K that I want to park in decent return investments.

I don’t really have a big investment pot already as I focused on becoming mortgage free first - £20K in emergency fund, £40K in Pension, £10K in crypto etc.

This is what I was thinking to do:

• Buy a ready to rent house - hand over to letting agent - £130K (in a ltd company)
• Buy another BTL on mortgage - £40K deposit (in a ltd company)
• We don’t currently have S&S ISA, so before I move, invest in that. I know I can’t contribute once I become a tax non resident - £40K (for wife & I)
• Open a GIA - invest the rest in index funds

Reasons:

1. I’m quite risk averse, so would prefer some bricks and mortar even though they maybe a headache. 
2. Houses would be in limited company to avoid any major CGT overhauls by the current government.
3. In line with my faith, I don’t want to invest in interest bearing accounts, so no bonds, high interest saving accts etc. (mortgage would be faith based finance)
4. Whilst I’m a non resident, I’ll be CGT exempt so investing in GIA should be protected.
5. I’m a high earner and with no tax in my new salary, I should be able to top up the above regularly.
6. I know I won’t have a primary residence and that’s okay for the next 5-10 years.

Help required:

1. Does the above seem reasonable?
2. Would you change the asset allocation and why?
3. I’m not sure about what to do with my pension, I recently had someone from SJP discuss options of moving the funds to them. The fees seemed too high, so I left it.
4. I can’t top up in SIPP whilst abroad, would you just move it to a SIPP and leave it?

Thanks for the help!

You're "risk averse" but have £10k in crypto?!

I'm moderately risk averse, and hold zero crypto, it's essentially built on almost nothing and can gain and lose value very quickly - although it doesn't do so with guaranteed "interest" so, perhaps a fair choice for religious reasons...

The issue with bricks and mortar, is that even if you use a management company, you are still the person responsible for ensuring that all the legal requirements are being adhered to, so things like rental deposit, gas and other safety inspections etc.

The S&S ISA (depending on which provider you use, and the risk level attached to it), is likely to involve a proportion of the assets being in bonds of some sort, or held as cash in interest bearing accounts (although not directly by you) does that create a problem for your faith?

Edit: As an example I have an S&S ISA with Moneybox which includes a small amount of cash (less than 1%) which states it is interest bearing (although I can't immediately see at what rate) and around 1/6th of the holding is in "Overseas Corporate Bonds".

My understanding is that SJP is expensive for what it is (which is possibly why they're having a few difficulties, as reported in the FT and other press outlets) so I wouldn't go for it myself, but there are lots of SIPP providers out there. SIPPs aren't something I have much knowledge of, so I can't advise but there are others with lots of knowledge.

The initial investment in crypto was only £4K made years ago. But agree and not looking to put more money in it.

Thanks for the heads up on S&S ISA, I’ve not really looked into what I can invest in. I thought I could well put in index funds same as a normal GIA, is that not the case?

Thank you!

Emmia

haychq said:

Emmia said:

haychq said:

Newbie here - any help appreciated.

I’m planning to move to Middle East before the end of year. I’ve sold my house and currently sat on £300K that I want to park in decent return investments.

I don’t really have a big investment pot already as I focused on becoming mortgage free first - £20K in emergency fund, £40K in Pension, £10K in crypto etc.

This is what I was thinking to do:

• Buy a ready to rent house - hand over to letting agent - £130K (in a ltd company)
• Buy another BTL on mortgage - £40K deposit (in a ltd company)
• We don’t currently have S&S ISA, so before I move, invest in that. I know I can’t contribute once I become a tax non resident - £40K (for wife & I)
• Open a GIA - invest the rest in index funds

Reasons:

1. I’m quite risk averse, so would prefer some bricks and mortar even though they maybe a headache. 
2. Houses would be in limited company to avoid any major CGT overhauls by the current government.
3. In line with my faith, I don’t want to invest in interest bearing accounts, so no bonds, high interest saving accts etc. (mortgage would be faith based finance)
4. Whilst I’m a non resident, I’ll be CGT exempt so investing in GIA should be protected.
5. I’m a high earner and with no tax in my new salary, I should be able to top up the above regularly.
6. I know I won’t have a primary residence and that’s okay for the next 5-10 years.

Help required:

1. Does the above seem reasonable?
2. Would you change the asset allocation and why?
3. I’m not sure about what to do with my pension, I recently had someone from SJP discuss options of moving the funds to them. The fees seemed too high, so I left it.
4. I can’t top up in SIPP whilst abroad, would you just move it to a SIPP and leave it?

Thanks for the help!

You're "risk averse" but have £10k in crypto?!

I'm moderately risk averse, and hold zero crypto, it's essentially built on almost nothing and can gain and lose value very quickly - although it doesn't do so with guaranteed "interest" so, perhaps a fair choice for religious reasons...

The issue with bricks and mortar, is that even if you use a management company, you are still the person responsible for ensuring that all the legal requirements are being adhered to, so things like rental deposit, gas and other safety inspections etc.

The S&S ISA (depending on which provider you use, and the risk level attached to it), is likely to involve a proportion of the assets being in bonds of some sort, or held as cash in interest bearing accounts (although not directly by you) does that create a problem for your faith?

Edit: As an example I have an S&S ISA with Moneybox which includes a small amount of cash (less than 1%) which states it is interest bearing (although I can't immediately see at what rate) and around 1/6th of the holding is in "Overseas Corporate Bonds".

My understanding is that SJP is expensive for what it is (which is possibly why they're having a few difficulties, as reported in the FT and other press outlets) so I wouldn't go for it myself, but there are lots of SIPP providers out there. SIPPs aren't something I have much knowledge of, so I can't advise but there are others with lots of knowledge.

The initial investment in crypto was only £4K made years ago. But agree and not looking to put more money in it.

Thanks for the heads up on S&S ISA, I’ve not really looked into what I can invest in. I thought I could well put in index funds same as a normal GIA, is that not the case?

Thank you!

I think you'd need to check the individual S&S providers. Mine is medium risk if that helps.

haychq

JamesRobinson48 said:

If you resume UK residence within five years of leaving, I believe capital gains during your time as a non resident will be subject to CGT in the tax year of your return.  See HMRC link below.

<link>

A BTL is not the first thing that springs to my mind as most suitable for a risk averse person. Real estate can be illiquid or fall in value.

There are sharia compliant bank savings accounts. Do you have any particular reason for dismissing them?

Correct on CGT, I’ve read on a few forums where expats generally realised the gains in their country of residence before moving back. I’ll need to define a strategy accordingly.

I don’t mind the investment being illiquid, should avoid the temptation of it being easily sold. Agree on BTL headache.

And yep, top tip on the sharia compliant savings, maybe I put emergency fund + part of the GIA portfolio there?

Thanks

Emmia

haychq said:

JamesRobinson48 said:

If you resume UK residence within five years of leaving, I believe capital gains during your time as a non resident will be subject to CGT in the tax year of your return.  See HMRC link below.

<link>

A BTL is not the first thing that springs to my mind as most suitable for a risk averse person. Real estate can be illiquid or fall in value.

There are sharia compliant bank savings accounts. Do you have any particular reason for dismissing them?

Correct on CGT, I’ve read on a few forums where expats generally realised the gains in their country of residence before moving back. I’ll need to define a strategy accordingly.

I don’t mind the investment being illiquid, should avoid the temptation of it being easily sold. Agree on BTL headache.

And yep, top tip on the sharia compliant savings, maybe I put emergency fund + part of the GIA portfolio there?

Thanks

A quick search indicates that there are Sharia compliant ISAs available from Al Rayan and other providers. I'd have a look to see what they might offer - a few links at random below

https://www.alrayanbank.co.uk/savings/cash-isas

https://gatehousebank.com/personal/savings/cash-isa/5-year-fixed-term-cash-isa

https://www.hl.co.uk/investment-services/sharia-compliant-investing

Bostonerimus1

Being a remote landlord is a real pain, even with a management company. You also don't mention anything about tax where you will be living, have you investigated the tax law in that country and double taxation treaties?

ToastLady

And yep, top tip on the sharia compliant savings, maybe I put emergency fund + part of the GIA portfolio there?

Thanks

Al Rayan allow you to bank with them if you live in UK or non-EU country, not all banks allow this, you'd have to check. UK banks insist on you having a UK address as far as I am aware. 
You may need to keep a UK mobile number for banking. Not sure if Al Rayan lets you use a foreign mobile number or not, you'd have to check.
When I lived abroad full time, before UK left EU, so didn't have my bank accounts closed, I kept a pay as you go UK mobile number, and just topped up every 90 days or sent a text to keep the number alive, which was vital for banking with an app. 

haychq

Emmia said:

haychq said:

JamesRobinson48 said:

If you resume UK residence within five years of leaving, I believe capital gains during your time as a non resident will be subject to CGT in the tax year of your return.  See HMRC link below.

<link>

A BTL is not the first thing that springs to my mind as most suitable for a risk averse person. Real estate can be illiquid or fall in value.

There are sharia compliant bank savings accounts. Do you have any particular reason for dismissing them?

Correct on CGT, I’ve read on a few forums where expats generally realised the gains in their country of residence before moving back. I’ll need to define a strategy accordingly.

I don’t mind the investment being illiquid, should avoid the temptation of it being easily sold. Agree on BTL headache.

And yep, top tip on the sharia compliant savings, maybe I put emergency fund + part of the GIA portfolio there?

Thanks

A quick search indicates that there are Sharia compliant ISAs available from Al Rayan and other providers. I'd have a look to see what they might offer - a few links at random below

<links>

Thank you will have a look at this. I assume if I invest in Cash ISA, it reduces from my £20K allowance of putting it into S&S ISA. I’ll research some more. Thanks again