What to do with £120k?

tight-wad_6

Hiya,

We've recently sold our house, prior to emigrating to New Zealand.

The plan is to rent there for a few months, before commiting ourselves, so am wandering what to do with the proceeds of our house sale, such that I can get a reasonable return without paying too much tax?

Am reckoning on leaving the funds in an account for approx 9 months, maybe more.

Is that possible?

Thanks,

T-W

purch

emigrating to New Zealand

The Kiwi is close to it's all time 'post floatation' high currently, but I would still think that moving your GBP into NZD would be a sensible move.

The equivalent to the Base Rate ('Official Cash Rate') has been held steady in since the middle of last year at 8.25%, and the Reserve Bank have little scope to cut the rate with the current inflationary pressures are keeping inflation above their 1-3% range, especially as the Aussies raised their rates to 7.25% earlier this year.

With the Federal Reserve still likely to cut the 'Carry Trade' which see's the NZD appreciating against the USD should continue for a time yet.

I think you could get something between 8 and 8 1/2 % on deposit for 9 to 12 months currently in Kiwiland

tight-wad_6

thanks ... I'd not even considered putting it into NZDs yet ...

We haven't got our visas yet, so not sure that I can invest it in a NZ bank yet ... for the time being, I've put it all in an online savings account ... abbey, at 6.5% gross (only if I don't make more than 1 withdrawal I believe).

Is this OK .. or could I be doing something better than that?

sideysid

I would be interested in hearing more about converting GBP into NZD.

I am in a similar position and have sold my house, but will only be in NZ temporarily till the end of the year.

I was thinking of filling in an R105 form or a R43 for when I return, but would something like this be a better option with an investment amount of £50k?

purch

You could also convert the GBP in EUR (which appears to be the reserve currency of choice nowadays)

The ECB will in all likelihood raise target rates soon, and in EUR the underlying value of the money will at least retain it's value, if not increase in value.

hawkesbaynz

Congrats on going to new Zealand. Was in Hawkes Bay for 2 years and loved it. Even made money with the exchange rate. (went on 2.85 and came back on 2.55). And 30% on house appreciation!

I would put your money into an off-shore account to benefit from no tax. We used Anglo-Irish in IofM. Look up on a comparison site for current best rates (Moneysupermarker.com).

Do not send all your money to New Zealand in one go. Consider in tranches of £30K to give yourself some protection from fluctuations. I used a number of exchange companies, some more opaque about rates than others. Will update on my preferred company when I find it on my favourites on home computer. This gave me some real headaches so try not to think too much about fluctuations.

Open a Kiwi bank account before you go. We used ASB Bank which was a world better than NatWest - you can join with the Commonwealth Bank in London. Most Kiwi Banks are owned by Aussie banks.
http://www.migrantbanking.co.uk/moving_to_new_zealand/

Don't make our mistake and buy too soon in New Zealand. The rental market is easier than the UKs. I can see the housing crashing greater than the UKs too. Massive bubble but with a difference to the UKs in that there is over supply. Make sure your rental has good heating as the houses are freezing (built for Australia in a New Zealand climate).

Where are you going? Can't wait to retire back there (Nov to March though).

purch

Do not send all your money to New Zealand in one go

I can see no obvious guaranteed benefit from following this advice.

hawkesbaynz

Why not? If you transfer the lot now and the Kiwi dollar drops against the pound you have lost. Though likewise you could be a winner if the Kiwi gains. Who knows where it is going, in my experience the experts are often wrong and I spent hours n' hours examining forecasts etc. If the experts were always right they would have borrowed/speculated/retired.

This is the same theory as Pound Cost Averaging in investing terms, and the advice from many quarters when transferring vast sums abroad.

I don't know if you transferred £200K from NZ to the UK like me. Initially the rate was good transferring the money, then it improved. I was very glad it didn't all get sent in one tranch. However it could have gone the other way! But I got the average by doing it in lumps.

My view.

purch

Why not?

I think you have either deliberately or accidentally missed out the word 'GUARANTEED' from my reply.....

How the OP proceeds will be up to him, and will depend on how he see's the situation at the time.

I respect your opinion, but as I said there is no GUARANTEED benefit from doing it this way

After trading the currency markets for as long as I have, I know nothing is absolute.