Best Savings Accounts for Pensioners Living overseas

MoneyMad

Hi,
I hope this is the right place to post this, here goes anyway. I have a friend who has retired in one of the EU countries after working in the UK for over 40 years. He would like to take advantage of the better savings rates available in the UK.
Question is:
1 - Whats involved in transferring money into a UK bank.
2 - Can he open an account with a UK bank whilst living aboard?
3 - Can he pay Tax on his savings in the EU country he lives in.?
4 - Is there a risk of double taxation?
5 - Where I can get him more information on being a pensioner overseas?

EdInvestor

UK banks will not normally open accounts for non-residents, though they will allow non residents to keep accounts they already have.

Their offshore branches in Isle of Man/Channel islands will take deposits from non residents, and the better accounts usually have reasonably competitive rates.There is now a 15% witholding tax deducted from interest.The interest should be declared on the local tax return.

The financial situation for pensioners varies a lot depending on the country they live in.Which one has he chosen?

MoneyMad

He tends to move around a lot but now lives mainly in Malta.
What is the 15% with holding tax for? If its to pay the tax on money earned then does he still have to declare it locally in Malta? if so, there does not appear to be any advantage in moving funds! is there?

EdInvestor

MoneyMad wrote: »

He tends to move around a lot but now lives mainly in Malta.
What is the 15% with holding tax for? If its to pay the tax on money earned then does he still have to declare it locally in Malta? if so, there does not appear to be any advantage in moving funds! is there?

The tax has been introduced across the EU because many people were parking savings offshore and not paying tax. He still needs to declare it in Malta - and pay extra if Malta has a higher rate of tax on savings than 15%.

Of course malta may charge a lower rate ( in which case there might be no advantage).The again he might get better interest rates if he saved elsewhere than what they pay in Maltese banks.

Just the usual tradeoff.

MoneyMad

So the long and short of it is:
1 - If he has a bank account in this country then he can carry on using it, but he wont be allowed to open a new one (unless he has an address in the uk he can use)
2 - Open an off shore acount like in IOM
3 - Pay Tax in Malta on the interest earned.

sounds ok to me.

Thanks

EdInvestor

MoneyMad wrote: »

1 - If he has a bank account in this country then he can carry on using it, but he wont be allowed to open a new one (unless he has an address in the uk he can use)

Address is not enough, you need utility bills/bank statements in your name etc. Money laundering regs basically mean it can't be done.