sackofspuds

If we end up moving back to Oz (still a bit up in the air; no IT jobs for me in Adelaide) then I won't be changing all our GBP into AUD straightaway.

The thing is, the best UK savings accounts are for UK residents.

Does anyone know:

1. Can I keep savings in the UK so long as I opened the savings account while I was a UK resident?

2. If not, would an offshore sterling account be appropriate? Any recommendations?

3. Anyone know of any sterling savings accounts in Oz?

ABCDiamond

Yes, you can keep your UK bank accounts open, even credit card accounts too

I know that HSBC Australia allows accounts in various different currencies, and would assume that other banks will do to.
http://www.hsbc.com.au/personal/accounts/fca.html
They currently pay 2.25% p.a. on Sterling accounts versus 4.50% p.a on AUD$ accounts.

Kentish Man

I took out an ISA before moving out here and don't intend to cash it in for a few years. There's no problem with having exisiting accounts in Britain even if you live overseas, it depends on your eligibility when opening the accounts not where you go after that.

Offshore accounts would mainly be considered for avoiding tax.

bondipom

Just one point on the ISAs. I got a nice letter from the tax man telling me that I could no longer contribute to the ISAs as I was no longer a UK tax resident. Not sure on the Oz tax man's views on earnings on ISA's but it won't be as generous as the Inland Revenue.

I have British savings, transaction and credit accounts. HSBC Australia do offer sterling accounts but I would check the fees.

ABCDiamond

Unfortunately, I think that the Australian Tax system seems to take care of them, by taxing you on ALL your WORLDWIDE income any way !
So they do not appear to be that useful for Tax, but I haven't looked into that fully, so I could be wrong.

Alan Collett

Not sure whether you've seen this webpage:
http://www.gomatilda.com/news/article.cfm?articleid=327

UK bank accounts are compared here.

Information about foreign currency denominated bank accounts in Australia is discussed here. HSBC seems to be the bank that has the widest choice of non-A$ currency bank accounts, but watch the tax position ...

Best regards.

ABCDiamond

It's a bit confusing to see that HSBC Australia pay:
2.75% to 3.75% on the £ Multi Currency Account,
but only 2.25% on the £ Foreign currency account !

and then on £ Term Deposits they pay
1 month 4.35% p.a.
2 months 4.38% p.a.
3 months 4.43% p.a.
6 months 4.49% p.a.

sackofspuds

[QUOTE=ABCDiamond]Yes, you can keep your UK bank accounts open, even credit card accounts too
QUOTE]

So do you believe that if I opened a UK savings account now and later informed them of my change of address to Australia they wouldn't have a problem with that? Take INGDirect for example, one of the best instant savings accounts. If you go to http://www.ingdirect.co.uk/html/oa/oa_online.html it clearly says that to open an account you must be "a UK resident for tax purposes". Likewise Bradford & Bingley Direct and Egg, two other instant accounts offering at least 5% AER.

Likewise, if I gave an Australian address to my credit card providers do you think they would be OK with that?

In terms of bank accounts, yes, I know from experience that isn't a problem.

sackofspuds

Well, if you're correct about eligibility at the point of opening the account, then I shouldn't have a problem with UK savings accounts. Presumably I can have the interest paid gross too?

Tax avoidance is illegal, is it not? Presumably the banks would take issue with your saying that offshore accounts are designed for this purpose

sackofspuds

I think it works like this. With ISAs you don't get tax relief on your contributions; the relief from the Inland Revenue is on withdrawals and on dividends and these only apply to UK residents.

With pensions, the Inland Revenue gives relief on the contributions. Clearly only UK residents get this. Withdrawals, on the other hand, are taxed in the UK and will, obviously, be taxed in Australia too.

ABCDiamond

it clearly says that to open an account you must be "a UK resident for tax purposes". Does it say anything about remaining a resident ?

I'm not sure of the other banks, but HSBC had no problems when I came out in 2000. I still have the accounts open that I had then, and even opened a savings account for my daughter just before we left.


You can get UK bank interest paid gross, but, the Australian Tax Office need you to declare it to them so they can tax it !

sackofspuds

Do you happen to know whether, if I get the interest paid net in the UK, the ATO won't tax it?

sackofspuds

No it doesn't, but I just phoned them and you have to live in the UK for at least 6 months of each year so I suggest it will be similar with other financial institutions.

Big Galah

I thought the Australian tax situation was that any gain (i.e. the increase in value of cash and/or shares) in a tax year on an ISA (or any overseas investments?) is taxable - even if you haven't cashed it in yet, but these thing get confusing so please correct me if I'm wrong.

On the question of offshore accounts and tax aviodance being illegal - well, the whole point of an offshore account is that you don't declare it because they can't tell you've got one. I'm sure someone will tell me UK legislation may change in the future to 'correct' this situation but that's conjecture and it's difficult to see how that would force the banks to contact the relevant tax authorities in the resident countries of the account holders - it probably being outside their juristiction - and the whole area of country of residence in relation to bank accounts being a bit grey anyway. Having said all that, I don't have one as I don't have enough money to make it worthwhile and I'm not encouraging people to do it - it's just that there are ways and means if you're really determined.

Big.

JAJ

They will, but you can reclaim the UK tax.


Jeremy