exchange rate move or best u.k saving rate
Feb 13th 2010, 12:57 am
#16
funky monkey.
Thread Starter
Joined: Jul 2008
Location: Leeds originally, now in Kallangur, Brisbane.
Posts: 66
Re: exchange rate move or best u.k saving rate
Some intersting points on this topic..
BAY's answer is quite right.. i am in Australia and have certain funds in the u.k but with the exchange being around 1.77 its not that great..
I am on a 4 years work (457) tempory visa with a look at perminent residency but its not garrenteed of course.. Even if i was a resident i am still interested in people ideas that if the exchange rate was to go further towards the $2 to one english pounds then i would exchange at that..just trying to figure out if its would be viable to keep the monies in a uk account at say 3-4% , or exchange NOW at around 1.77 and get the funds into a saver account here on around 6%
I guess the banks in the u.,k are around 3% -4% for savings if your lucky??
Here in oz i am with bankwest.. they are doing this at the moment.
http://www.bankwest.com.au/Personal/...ver/index.aspx
At 6% its pretty good... i am not by any means great with percentages or working out what will be the better in the long run..
If we go on a basic sum of 10000 UK pounds what would your opinions on this be?
exchange NOW and put into OZy high interest account or keep funds in the u.k at a rate of 3-4% in the hope things will pick up before i exchange to AUD??
BAY's answer is quite right.. i am in Australia and have certain funds in the u.k but with the exchange being around 1.77 its not that great..
I am on a 4 years work (457) tempory visa with a look at perminent residency but its not garrenteed of course.. Even if i was a resident i am still interested in people ideas that if the exchange rate was to go further towards the $2 to one english pounds then i would exchange at that..just trying to figure out if its would be viable to keep the monies in a uk account at say 3-4% , or exchange NOW at around 1.77 and get the funds into a saver account here on around 6%
I guess the banks in the u.,k are around 3% -4% for savings if your lucky??
Here in oz i am with bankwest.. they are doing this at the moment.
http://www.bankwest.com.au/Personal/...ver/index.aspx
At 6% its pretty good... i am not by any means great with percentages or working out what will be the better in the long run..
If we go on a basic sum of 10000 UK pounds what would your opinions on this be?
exchange NOW and put into OZy high interest account or keep funds in the u.k at a rate of 3-4% in the hope things will pick up before i exchange to AUD??
Feb 13th 2010, 5:07 am
#17
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Joined: May 2008
Location: NSW, Australia
Posts: 376
Re: exchange rate move or best u.k saving rate
Hi
This is a very interesting discussion for me as we have yet to move the proceeds of our house sale out to Australia. I believe that any forex gain within 6 months of moving out to Australia is ignored for tax purposes.
I also heard that there are other allowances after 12 months but I can find no links to confirm this.
Best wishes
Charlie
This is a very interesting discussion for me as we have yet to move the proceeds of our house sale out to Australia. I believe that any forex gain within 6 months of moving out to Australia is ignored for tax purposes.
I also heard that there are other allowances after 12 months but I can find no links to confirm this.
Best wishes
Charlie
Feb 13th 2010, 2:16 pm
#18
Retired
Joined: Apr 2004
Posts: 34,649
Re: exchange rate move or best u.k saving rate
Hi
This is a very interesting discussion for me as we have yet to move the proceeds of our house sale out to Australia. I believe that any forex gain within 6 months of moving out to Australia is ignored for tax purposes.
I also heard that there are other allowances after 12 months but I can find no links to confirm this.
This is a very interesting discussion for me as we have yet to move the proceeds of our house sale out to Australia. I believe that any forex gain within 6 months of moving out to Australia is ignored for tax purposes.
I also heard that there are other allowances after 12 months but I can find no links to confirm this.
http://britishexpats.com/wiki/Austra...Special_Issues
You will do well to think Australian from now, and keep your finances simple. Unclear why you have kept your exposure to sterlingm it could fall as easily as increase. Gold and silver are probably better options than cash anyway, at least for the long term.
Feb 13th 2010, 9:07 pm
#19
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Joined: May 2008
Location: NSW, Australia
Posts: 376
Re: exchange rate move or best u.k saving rate
Thanks for the link - very useful.
I would love to keep my finances simple but I have a UK final salary pension, so will be at the mercy of forex for ever.
Charlie
I would love to keep my finances simple but I have a UK final salary pension, so will be at the mercy of forex for ever.
Charlie
Feb 14th 2010, 12:40 am
#20
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Joined: Apr 2004
Posts: 34,649
Re: exchange rate move or best u.k saving rate
Final salary pension is simpler than other situations - as far as I know if you leave it in place, it only gets taxed when you get paid out in the future.
Feb 15th 2010, 3:32 am
#21
Banned
Joined: Feb 2008
Posts: 421
Re: exchange rate move or best u.k saving rate
Some discussion here, :
http://britishexpats.com/wiki/Austra...Special_Issues
You will do well to think Australian from now, and keep your finances simple. Unclear why you have kept your exposure to sterlingm it could fall as easily as increase. Gold and silver are probably better options than cash anyway, at least for the long term.
http://britishexpats.com/wiki/Austra...Special_Issues
You will do well to think Australian from now, and keep your finances simple. Unclear why you have kept your exposure to sterlingm it could fall as easily as increase. Gold and silver are probably better options than cash anyway, at least for the long term.
Ummmmm......
Considering my experience, having actually asked and reported back my findings, then to find this link; i mean this is a home made link, a British Expats site homemade Wiki? What is the BE site vested interest in getting migrants funds into Oz asap?
Quote"Transfer your funds into Australian dollars (whether you physically move the funds to Australia or not is irrelevant) before you become Australia tax resident;
If you wait 12 months after becoming tax resident before converting to Australian dollars, your capital gain is reduced by 50%."
Where and why is this information quoted, surely an official ATO document quoting this information, then maybe believable, but a homemade, thats amusing?
Who owns this site, surely a vested interest in making sure migrants now and future move all there money to Australia asap, so they can be taxed on it asap. If they don't move it, and leave it in Sterling the ATO cannot tax it, only HMRC can tax it. So what the British Expats site is saying if you do not move it, because it is your money, you can do what you like with it. But the ATO will more or less TAX it if you do not move it and wait until you think the time is right for you. I do not understand this at all. The ATO quote " never heard of the tax" yet the British Expats site quote that there is a tax in their Wiki.
Would this stand up in the court of law, i doubt it very much, i would definately seek legal advice, funny!
I guess if anyone is still concerned, print off the BE Wiki quotes show it to the ATO, and email the link to the ATO, see what they say?
.
Last edited by brendarover; Feb 15th 2010 at 3:35 am.
Feb 15th 2010, 3:50 am
#22
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Joined: Apr 2004
Posts: 34,649
Re: exchange rate move or best u.k saving rate
No-one has a vested interest in anything. The article contains links to the ATO resources and it's up to you what you decide to do. And once again, it's not really a tax as it can just as easily be a loss as a gain.
I do question why people settling in Australia want to indulge in currency speculation but that is their choice.
I do question why people settling in Australia want to indulge in currency speculation but that is their choice.
Feb 16th 2010, 6:10 am
#23
funky monkey.
Thread Starter
Joined: Jul 2008
Location: Leeds originally, now in Kallangur, Brisbane.
Posts: 66
Re: exchange rate move or best u.k saving rate
Here in oz i am with bankwest.. they are doing this at the moment.
http://www.bankwest.com.au/Personal/...ver/index.aspx
At 6% its pretty good... i am not by any means great with percentages or working out what will be the better in the long run..
If we go on a basic sum of 10000 UK pounds what would your opinions on this be?
exchange NOW and put into OZy high interest account or keep funds in the u.k at a rate of 3-4% in the hope things will pick up before i exchange to AUD??
__________________
http://www.bankwest.com.au/Personal/...ver/index.aspx
At 6% its pretty good... i am not by any means great with percentages or working out what will be the better in the long run..
If we go on a basic sum of 10000 UK pounds what would your opinions on this be?
exchange NOW and put into OZy high interest account or keep funds in the u.k at a rate of 3-4% in the hope things will pick up before i exchange to AUD??
__________________
Feb 16th 2010, 6:21 am
#24
BE Enthusiast
Joined: May 2008
Location: NSW, Australia
Posts: 376
Re: exchange rate move or best u.k saving rate
Here is a simple sum.
Assume £400k proceeds of a house sale in the UK. At current rate (approx 1.8) this gives $720k.
However, about 16months ago I bought some Au$ at a rate of 2.47 which is equivalent to $988k. Do the sums and see this is a BIG difference.
Yes I cannot see the rate getting back to 2.47 for some time, if at all, but the amounts of money involved are significant. So wait and see for a while?
Charlie
Assume £400k proceeds of a house sale in the UK. At current rate (approx 1.8) this gives $720k.
However, about 16months ago I bought some Au$ at a rate of 2.47 which is equivalent to $988k. Do the sums and see this is a BIG difference.
Yes I cannot see the rate getting back to 2.47 for some time, if at all, but the amounts of money involved are significant. So wait and see for a while?
Charlie
Feb 16th 2010, 7:17 am
#25
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Joined: Jun 2009
Location: Wivenhoe
Posts: 595
Re: exchange rate move or best u.k saving rate
Here is a simple sum.
Assume £400k proceeds of a house sale in the UK. At current rate (approx 1.8) this gives $720k.
However, about 16months ago I bought some Au$ at a rate of 2.47 which is equivalent to $988k. Do the sums and see this is a BIG difference.
Yes I cannot see the rate getting back to 2.47 for some time, if at all, but the amounts of money involved are significant. So wait and see for a while?
Charlie
Assume £400k proceeds of a house sale in the UK. At current rate (approx 1.8) this gives $720k.
However, about 16months ago I bought some Au$ at a rate of 2.47 which is equivalent to $988k. Do the sums and see this is a BIG difference.
Yes I cannot see the rate getting back to 2.47 for some time, if at all, but the amounts of money involved are significant. So wait and see for a while?
Charlie
What if the house in Oz is now only worth $720K? Unlikely but possible.
The problem that I see at the moment is there is no good rate of interest on UK saving unless you lock it up for 3 years or more and if you are going to take advantage of any shift in the exchange rate you need instant access to your funds, £400k at 0.5% is not good. $720K at 6% is a whole lot better.
It is easy for me to say as we are not at that stage yet so we just pluging away at buying $s each month and hope our average remains close to $2 to £1. Best of luck in what ever you choose to do.
Feb 16th 2010, 7:18 pm
#26
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Joined: Jul 2007
Posts: 405
Re: exchange rate move or best u.k saving rate
I just transferred my savings back from aussie bank to the uk, didnt have that much to be fair, but the gains at this end will pay for a flight back to Oz this year, i sympathise with anyone having this dilemma, i squirrelled cash away and forex'd to Oz on a number of occasions, taking advantage of the previously high rates, now im selling my uk house and my mortgage free australian future is in tatters, it wont stop me coming but will make things a whole lot harder financially.If you dont understand why people may think leaving the cash in the uk until the rate improves(or doesnt?) do some calculations, 6% is great if youre going to tie up your cash for years, but im thinking people are hoping to see 2.40 ish again soon, which is a hell of a payout if it happens and would be life changing for me. It may not happen, then again it just might, nobody expected the global down turn now, did they???? Seems to be some damning of those of us stuck in UK with our dreams being eroded by those settled and sorted.Just my 2 cents.
Feb 16th 2010, 10:37 pm
#27
(It's not my real name)
Joined: Sep 2002
Location: Ilukapool. WA
Posts: 12,467
Feb 18th 2010, 7:36 am
#28
Banned
Joined: Feb 2008
Posts: 421
Re: exchange rate move or best u.k saving rate
No-one has a vested interest in anything. The article contains links to the ATO resources and it's up to you what you decide to do. And once again, it's not really a tax as it can just as easily be a loss as a gain.
I do question why people settling in Australia want to indulge in currency speculation but that is their choice.
I do question why people settling in Australia want to indulge in currency speculation but that is their choice.
I have read some of your previous posts on this board, so your view does surprise me a weee bit?
But.............
In answer to your statement in bold above, well.........
If you have worked all your life in the UK, paid your mortgage, done a 60 hour week for years, watched your house in the UK rise in value, no speculation, it just went up like everyone elses. Then you decide to emigrate, so at the time of application, you do the sums. The house should sell at "x", we should recieve "y" at "z" exchange rate.
OK, you get for your house what someone is willing to pay, somewhere near what the lying barstweward estate agent said it would sell for. Lets say you are left with 150 grand in Sterling. Your lifes savings in monetry terms, you had done the maths on visa application at 2.5 to 1, all of a sudden when you book your flights two years later, its dropped to 1.7 to 1, like now.
This is a life changing sum of money, i do not care about it is as it is, its about Australia blah di blah! On arrival your job you have lined up pays $50,000.00 dollars a year gross.
On 150 grand sterling you have not lost, but the difference in the exchange rate from application to arrival is 0.8, and thats on 150 grand sterling, so it adds up to $120,000.00 dollars, nearly two and a half years gross income.
Now if that does not answer your question, well i am sorry, because like many, i would wait. Australia, is.........another country, but it ain't goin anywhere, and we all have to work. If waiting saves me working for two and a half years, well i am no rocket scientist, but my 10 year old niece could work this one out.
Feb 18th 2010, 8:07 am
#29
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Re: exchange rate move or best u.k saving rate
Far better explained than my feeble effort.
Charlie
Charlie
Feb 18th 2010, 11:04 am
#30
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Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: exchange rate move or best u.k saving rate
Right!
You can make an appointment for an interview by telephoning 13 28 61, then find out for yourself.
OK, i have an input. I recently made a enquiry regarding your above statement in person here;
Brisbane CBD
280 Adelaide Street
Brisbane QLD 4000
I made an appointment and had a chat to a human. Not a forum, but a real human. I would have to agree, you are taxed on your worldwide income, so any savings in the UK, you have to declare any interest recieved while you hold Australian tax residency; well you do not have to, but you are supposed to declare any interest on savings. Some do, some do not, the only ay they would/maybe find out is if you bought the savings into Australia, but you could have had a windfall, a gift, an inheritance, anything, but just use your head. They are an organisation the ATO, not the third reich like some on here will try to portray them as? They do share information the ATO and the HMRC, but lets be honest, they have better things to do than to check the savings interest on Aunty Betty's supersaver account?
Forex gains tax for personal reasons is a smokescreen, never heard of it, talk to loads of expats, loads of Brits in the UK, and now the ATO. No such tax, if you have money in the UK, its up to you when you exchange it, if you do not believe me, make the appointment and ask, they will tell you what i tell you. I was curious because my wife, has a five figure inheritance sitting in a two year fixed rate bond in the UK. She was worried about inheritance tax as she recieved it in sterling in the UK while we are Australian tax residents. There is no inheritance tax in Australia, nor forex gains tax for personal money exchange. I told them she did not want to exchange the money straight away because we may or may not return to the UK and she did not want to lose out if she exchanged now, well when she recieved it, then later decided not to spend it so had to exchange it back to UK Sterling. So we are leaving it in Sterling until we decide what to do, if we benefit from a upside in the exchange rate then its because we waited, if we lose out well its because we waited. But we are waiting, not looking for a gain or a loss. If we gain we gain, but not speculating, just not wanting to exchange, its our money, we may leave it in the UK for good. But i repeat, the representitive had never heard of such a tax when moving money. There is one for business, and one for pensions, but NOT for savings.
No wait for the SS to come along!
You can make an appointment for an interview by telephoning 13 28 61, then find out for yourself.
OK, i have an input. I recently made a enquiry regarding your above statement in person here;
Brisbane CBD
280 Adelaide Street
Brisbane QLD 4000
I made an appointment and had a chat to a human. Not a forum, but a real human. I would have to agree, you are taxed on your worldwide income, so any savings in the UK, you have to declare any interest recieved while you hold Australian tax residency; well you do not have to, but you are supposed to declare any interest on savings. Some do, some do not, the only ay they would/maybe find out is if you bought the savings into Australia, but you could have had a windfall, a gift, an inheritance, anything, but just use your head. They are an organisation the ATO, not the third reich like some on here will try to portray them as? They do share information the ATO and the HMRC, but lets be honest, they have better things to do than to check the savings interest on Aunty Betty's supersaver account?
Forex gains tax for personal reasons is a smokescreen, never heard of it, talk to loads of expats, loads of Brits in the UK, and now the ATO. No such tax, if you have money in the UK, its up to you when you exchange it, if you do not believe me, make the appointment and ask, they will tell you what i tell you. I was curious because my wife, has a five figure inheritance sitting in a two year fixed rate bond in the UK. She was worried about inheritance tax as she recieved it in sterling in the UK while we are Australian tax residents. There is no inheritance tax in Australia, nor forex gains tax for personal money exchange. I told them she did not want to exchange the money straight away because we may or may not return to the UK and she did not want to lose out if she exchanged now, well when she recieved it, then later decided not to spend it so had to exchange it back to UK Sterling. So we are leaving it in Sterling until we decide what to do, if we benefit from a upside in the exchange rate then its because we waited, if we lose out well its because we waited. But we are waiting, not looking for a gain or a loss. If we gain we gain, but not speculating, just not wanting to exchange, its our money, we may leave it in the UK for good. But i repeat, the representitive had never heard of such a tax when moving money. There is one for business, and one for pensions, but NOT for savings.
No wait for the SS to come along!
http://law.ato.gov.au/atolaw/view.ht...7#108-5%281%29
So if nothing else, holding GBPs when a tax resident of Australia means you have a CGT asset which is taxed in the same manner as any other investment.
The forex rules overlay the CGT rules.
There are also various Private Binding Ruling extracts on the ATO website, such as:
http://www.ato.gov.au/rba/content.as...tent/65872.htm
While I acknowledge that a Private Ruling is specific to the taxpayer that applied for it, I submit that those who are retaining GBPs in contemplation of an improvement in the number of AUDs they will receive may well have a tax exposure when they eventually sell £ and buy A$'s.
Agreed that these provisions may well be observed more in the breach than in the compliance, but I have yet to see any specific exemption in the tax code that some on this thread are suggesting exists.
Best regards.