How does an expat invest?
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TheGullyFoyle
Posts: 2 Newbie
Hi there
A little over a year ago I moved to the USA to take up a job. When I left I had 6k in my current account, and approximately 22k in my fixed rate ISA.
Recently the interest rate on the ISA expired, and I thought I would try an earn more interest in the long run by putting it into stocks and shares. I applied to move it to some Index Tracked Funds with Legal and General, however they wouldn't allow me to, as apparently you can only invest in an ISA if you are tax resident in the UK, which I am not (I pay taxes here in the USA).
My simple question is - what should I do with my 22k savings?
At the moment it only earns a paltry 0.25% in the base rate Halifax ISA which it is in. As soon as I move it out to a current account I won't be able to make even that.
At the moment I am thinking of paying off my student loan, which currently stands at 21k. The interest rate on that is currently 0.9%, which is miniscule, but still higher than what it seems I'll be losing by just letting my money sit there doing nothing.
Had this been a few months ago, I simply would have transferred it all to the USA and invested it here, however Sterling has plummeted in value recently and I would take a decent haircut just on the exchange rate.
The only other option seems to be going for an offshore investment fund, but I know very little about this, apart from that they seem to be used by tax evaders!
Many thanks in advance to anyone who can help. It would be nice if they had an expat forum here!
A little over a year ago I moved to the USA to take up a job. When I left I had 6k in my current account, and approximately 22k in my fixed rate ISA.
Recently the interest rate on the ISA expired, and I thought I would try an earn more interest in the long run by putting it into stocks and shares. I applied to move it to some Index Tracked Funds with Legal and General, however they wouldn't allow me to, as apparently you can only invest in an ISA if you are tax resident in the UK, which I am not (I pay taxes here in the USA).
My simple question is - what should I do with my 22k savings?
At the moment it only earns a paltry 0.25% in the base rate Halifax ISA which it is in. As soon as I move it out to a current account I won't be able to make even that.
At the moment I am thinking of paying off my student loan, which currently stands at 21k. The interest rate on that is currently 0.9%, which is miniscule, but still higher than what it seems I'll be losing by just letting my money sit there doing nothing.
Had this been a few months ago, I simply would have transferred it all to the USA and invested it here, however Sterling has plummeted in value recently and I would take a decent haircut just on the exchange rate.
The only other option seems to be going for an offshore investment fund, but I know very little about this, apart from that they seem to be used by tax evaders!
Many thanks in advance to anyone who can help. It would be nice if they had an expat forum here!
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Comments
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Do remember that the US does not recognise the tax free status of ISAs.The only other option seems to be going for an offshore investment fund, but I know very little about this, apart from that they seem to be used by tax evaders!
They are not used for evasion. They are used for deferring and tax roll up.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
TheGullyFoyle wrote: »Had this been a few months ago, I simply would have transferred it all to the USA and invested it here, however Sterling has plummeted in value recently and I would take a decent haircut just on the exchange rate.
In practice, most of the things you might invest in will have risen in price in sterling terms by much the same as the dollar. So there might be less of a problem in transferring the money across to USA before investing it, than you think.0 -
The USA is special, since banks and stockbrokers around the world are obliged to report to the US government about any interest and dividends that they pay to investors who are US residents or citizens. Most of the opportunities open to expats make it clear that they will not accept US people as clients. So your best bet is to transfer the money to the USA and invest from there: while you will take a loss on the exchange rate, once you are using dollars to buy assets in the UK you will get great value for money.0
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If you want to invest why not invest in a tracker from the US or use an international broker like TD Waterhouse international:
http://int.tddirectinvesting.com/Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
Thank you for the comments.
Yes, I have been declaring my overseas bank accounts (UK ones) when doing my tax returns out here.
My situation is made slightly more difficult by the fact that I could move back to the UK in just a few years from now.
If I transfer the money to dollars now, invest it in a USA based fund (even a global one), and then move it back into Sterling in a few years time when Sterling will likely have recovered, I will probably end up losing more on the exchange than I might make in interest (especially as global markets seem to be quite high at the moment).
Ideally I was thinking I would try to invest the money in the FTSE, and bank on Sterling recovering, and the economy going upward at least a little over the next few years as the whole Brexit fiasco is worked out.
Is there a way to do this without investing through an ISA? I know very little about buying shares directly.0
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