Sending Dirhams (and not converting) to a UK account?
 

Hi there, long time lurker here :)

I want to send about 20k AED per month to an AED bank account in the UK (and not have it converted to Sterling). I'm coming to Dubai on Wednesday and won't have a bank account for a week or so (or however long it takes to open one) but once it is all set up, will it be a problem to transfer AED back? I've head rumours that it can be difficult to get Dirhams out of Dubai if they're not being converted to Euro, USD, Sterling etc.

Also, what stuff should I take with me when I open my account to minimise the delay in getting it open?

Thanks! :)

Re: Sending Dirhams (and not converting) to a UK account?
 

Who will open an AED account in the UK and don't you think you ought to be careful about tax on a remittance basis?

You are taking a risk - why not convert it to USD, GBP or Euro and hold offshore. If you are speculating then why not use derivatives - there are reputable places where you can trade these.

Re: Sending Dirhams (and not converting) to a UK account?
 

I thought that if set up as Non-Resident for tax purposes (P85) it's possible to send money back?

The reason for sending back in AED is to pay for a 12 month forward contract to lock the exchange rate for AED to Sterling (36k contract - 3k/ month to be paid in AED back to the broker).

Re: Sending Dirhams (and not converting) to a UK account?
 

The P85 does not exempt you. It is a good sign that you are overseas but it is not the only qualification for tax free status which is based on Residence Rules and not the P85.

The 90 day rule and being away for more than a tax year are the main qualifications but sending money into the UK can be hazardous. A scenario of sending it to the UK where it will be used to pay bills could be interpreted as avoidance and so it is better to keep it offshore.

If you give it to a relative it could be interpreted as an income is another occasion where HMRC can get involved.

The issue is not in hiding things offshore - but in using the system to defer any tax liability until you retur to Europe. If you have been away for a while, complied with the 90 day and other rules and make a 'clean break' at the end then you should have no liability.

An insider secret is that your amount is reasonable and the banking system will not bother about 3k per month. Try 36k at the end of the year and that will be noticed!

Dont forget that if you are coming out this week then your status will not be confirmed as non-resident until April 6 2010 - that is why you should be careful! HMRC are totally unreasonable.

Good luck.

Re: Sending Dirhams (and not converting) to a UK account?
 

nice post Bijilo123 - thanks

Re: Sending Dirhams (and not converting) to a UK account?
 

Many thanks Bijilo. Very helpful! :)

Presumably I shouldn't experience any problem in transferring AED out of the country though to my broker?

Re: Sending Dirhams (and not converting) to a UK account?
 

I'm sure you'll have no problems transferring to your broker. I would not transfer any money at all to a broker because he could steal it. Only transfer to a bank in your name. I hope that I am just taking your words to literally and that is what you mean.

Also don't assume that the bank in UAE will rip you on the conversion and there is something to be said about leaving cash in UAE for the time being. Or a mixture of both.

Gd lck

Re: Sending Dirhams (and not converting) to a UK account?
 

Cheers Bijilo, that is what I meant. Would just like tot take advantage of the strong dollar at the moment before it all goes tits up!