Saving/Investing From Overseas

tuatara · 9 August 2019 at 11:42PM

Evening all,

I'm just after some advice. I currently have around £75k spread around various places - Stocks ISA, Premium Bonds, pension. The thing is, though, that I'm moving to Berlin in a couple of months and I'm wondering what to do with it all.

From what I can tell, Germany has no equivalent to ISAs, and they're not really the investing kind (for whatever reason). Now, I know I can still keep Premium Bonds abroad, but I'm keen to make my money work for me. The Stocks ISA I have will have to be closed because it's UK residents only.

So, what do expats do, particularly with a no-deal brexit looming? I know it's a bit of having my cake and eating it, but 25% CGT in Germany isn't particularly appealing

thanks in advance

xylophone · 10 August 2019 at 12:18AM

Your pension could be no problem for a while at least.

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/contributions-to-registered-schemes-for-overseas-individuals/

Perhaps you could sell the stocks and shares and invest as much as possible in your pension before you go.

You could presumably keep a UK bank account.

https://www.expertsforexpats.com/expat-financial-advice/expat-investments-investment-opportunities-reviewed/ might be worth a look.

eskbanker · 10 August 2019 at 1:00AM

tuatara wrote: »

The Stocks ISA I have will have to be closed because it's UK residents only.

Not so - you can keep it open, but just not make further contributions while tax-resident elsewhere, as explained at https://www.gov.uk/individual-savings-accounts/if-you-move-abroad:

If you move abroad

If you open an Individual Savings Account (ISA) in the UK then move abroad, you cannot put money into it after the tax year that you move (unless you’re a Crown employee working overseas or their spouse or civil partner).

You must tell your ISA provider as soon as you stop being a UK resident.

However, you can keep your ISA open and you’ll still get UK tax relief on money and investments held in it.

You can pay into your ISA again if you return and become a UK resident (subject to the annual ISA allowance).

xylophone · 10 August 2019 at 10:29AM

Not so - you can keep it open,

Only if the provider of the stocks and shares ISA agrees?

It may be that the platform is not willing to deal with non-residents?

DesG · 10 August 2019 at 11:19AM

tuatara wrote: »

So, what do expats do, particularly with a no-deal brexit looming? I know it's a bit of having my cake and eating it, but 25% CGT in Germany isn't particularly appealing

ISA's are only tax free if you are UK tax resident, if you are resident in another country you will need to pay their tax rate on your ISA income/CG. (Assuming the country taxes worldwide income which most do.)

FatherAbraham · 10 August 2019 at 4:48PM

tuatara wrote: »

Evening all,

I'm just after some advice. I currently have around £75k spread around various places - Stocks ISA, Premium Bonds, pension. The thing is, though, that I'm moving to Berlin in a couple of months and I'm wondering what to do with it all.

From what I can tell, Germany has no equivalent to ISAs, and they're not really the investing kind (for whatever reason). Now, I know I can still keep Premium Bonds abroad, but I'm keen to make my money work for me. The Stocks ISA I have will have to be closed because it's UK residents only.

So, what do expats do, particularly with a no-deal brexit looming? I know it's a bit of having my cake and eating it, but 25% CGT in Germany isn't particularly appealing

thanks in advance

A UK ISA can protect you from UK taxation, but it's useless against other jurisdictions. Thus, if you liquidate your shares ISA while UK resident, there will be no capital gains tax to pay. If you wait until you've moved to Germany, your sale of assets may be subject to German CGT.

Selling your ISA assets in UK, then repurchasing will rebase the acquisition cost for future CGT purposes. A clever trick would to do that inside an ISA which doesn't forbid non-resident holding -- your have the best of both worlds - a high base cost for the assets, and ISA protection if you return to UK in the future.

FatherAbraham · 10 August 2019 at 4:53PM

tuatara wrote: »

Evening all,

I'm just after some advice. I currently have around £75k spread around various places - Stocks ISA, Premium Bonds, pension. The thing is, though, that I'm moving to Berlin in a couple of months and I'm wondering what to do with it all.

From what I can tell, Germany has no equivalent to ISAs, and they're not really the investing kind (for whatever reason). Now, I know I can still keep Premium Bonds abroad, but I'm keen to make my money work for me. The Stocks ISA I have will have to be closed because it's UK residents only.

So, what do expats do, particularly with a no-deal brexit looming? I know it's a bit of having my cake and eating it, but 25% CGT in Germany isn't particularly appealing

thanks in advance

Keeping Premium Bonds, whose prizes are exempt from UK taxation, but not from any other jurisdiction's taxation, might be the worst thing you could possibly do.

I think the problem is that you're looking at the problem from the wrong side.

You need to get well informed on German taxation, in particular, whether there's any concept of non-domicile. It's German tax law which you must respect, primarily.

themanfromamarillo · 11 August 2019 at 11:47AM

So my understanding of it is that all your interest, capital gains, dividends etc. are packaged together as income from capital. You get some amount of income from capital that is tax free (about 850EUR but I'm not sure) and after that you are charged at tax of 25% plus you will probably pay the 5.5% "solidarity tax" on top of that.

I live in Germany and haven't found any ISA equivalents. The big banks offer broker accounts.

You will need to declare your worldwide interest, dividend payements and capital gains in your German tax return.There are tax offices (Finanzamt) where you can go and ask questions in person. I've sometimes had a bit of back and forth with them by post after I submitted my return with them asking for more statements and what exchange rate I used for what payment etc.

One thing I would definitely start to read up on is where you are going to get a current account (Girokonto). Germany has a slightly annoying thing with cash machines where a lot of cards can only be used at the machines of a particular network of banks. There's a few big ones (DB, Commerzbank and Postbank form one, the varous Sparkasses another, then there's another with smaller banks). Worth checking out which cash machines you can use with which accounts.

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