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Where do we put the dosh??

Where do we put the dosh??

Old Jun 5th 2005, 7:55 pm
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Default Where do we put the dosh??

Any advise anyone. As we understand it you get taxed on savings at quite a rate - is it worth leaving savings from uk house sale in uk until we're ready to purchase house in nz????

any other suggestions greatly appreciated.
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Old Jun 5th 2005, 8:11 pm
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Default Re: Where do we put the dosh??

Originally Posted by Joshlin
Any advise anyone. As we understand it you get taxed on savings at quite a rate - is it worth leaving savings from uk house sale in uk until we're ready to purchase house in nz????

any other suggestions greatly appreciated.
All the main banks eg ANZ / National allow non residents to get deposit a/cs with just a two percent non resident tax rate on your interest - apologies my computer is playing up so I have to write 'two'. It is called approved issuer status.

So you get NZ's better interest rates with a small witholding tax.

Whilst you are UK based. If NZ based you couldn't do this.
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Old Jun 5th 2005, 10:38 pm
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Exclamation Re: Where do we put the dosh??

Originally Posted by Joshlin
Any advise anyone. As we understand it you get taxed on savings at quite a rate - is it worth leaving savings from uk house sale in uk until we're ready to purchase house in nz????

any other suggestions greatly appreciated.
Hi Joshlin,
If you have sold in the UK, you may have perfectly timed the market and got out just before a downwards price correction.
If the gurus on www.housepricecrash.co.uk are correct this correction is already underway. Prices have been very gently declining since last August.
In NZ and OZ and USA there is also a house price bubble. Prices here have rocketed in the last three years. Many people think there will be a correction soon here too.
Whether or not it happens remains to be seen. Opinions are divided with vested interests like estate agents saying 'no crash' and some other experienced observers eg 'Ollie Newlands' saying that its due anytime. especially in Auckland CBD where there is a huge oversupply of new build apartments.
The other issue is currency exchange rates. The NZ dollar is at a near historic high. If you exchange pounds for dollars at present you will get the least number of dollars for many years.
Interest rates are higher here but that reflects the risk. The NZ dollar is a small currency and is subject to many out-of-its-control influences.
Decisions, decisions. It's your call and its not easy is it? Everybody struggles with these problems.
If you are confident that you will not return to UK in the next few years it might make sense to bring it over to NZ and put it on deposit here. Then you at least have certainty about the amount. If you prefer to gamble on the NZ dollar falling against the pound then when you decide the time is right the actual transfer process can take just a few minutes if you use an internet bank like HSBC First Direct.
If you feel that you might return to the UK in the near future. Then you have the opportunity to deposit it in UK and rent here. There is a large house rental market here with many properties of all kinds at all prices. Many landlords here rent out for much less than it would cost you to buy the same house on a mortgage. They call it 'negative gearing'. The landlord effectively subsidises your rent! The standard tenancy agreements allow you to leave at very short notice. Its very flexible and easy to live with as a tenant.
Good luck..PINZ
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Old Jun 6th 2005, 2:34 am
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Default Re: Where do we put the dosh??

Regarding house prices, there is a downward trend in some areas but others continue to rise gently. The areas that saw the massive price rises, such as Nelson, Hawkes Bay and parts of Auckland, are definitely dropping. Others, for example where I live in Waikanae, continue to rise slowly with steady demand. Some beachfront properties are also starting to decline, as are lifestyle block prices.

Regarding money, we keep a swag in a Foreign Currency Account at the National bank. This account is in pounds sterling, can be drawn at will (shortly possible via internet banking), and pays interest. Not much interest though - it works out at about $25 per $10,000, per month. You pay Resident Witholding Tax on the interest only, this is calculated at 39% and works out to about $10 of that $25.

I then transfer money to my NZ current account when the NZ dollar is weak.

I did keep it all in an offshore account in Jersey for a while, but the cost of operating the account was more than it was worth.

There are probably several other ways, but that worked best for me.
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Old Jun 6th 2005, 7:48 pm
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Default Re: Where do we put the dosh??

Originally Posted by Joshlin
Any advise anyone. As we understand it you get taxed on savings at quite a rate - is it worth leaving savings from uk house sale in uk until we're ready to purchase house in nz????

any other suggestions greatly appreciated.

Many many thanks - definately food for thought
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Old Jun 7th 2005, 12:33 am
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Default Re: Where do we put the dosh??

Originally Posted by Joshlin
Many many thanks - definately food for thought
If in any doubt about the above advice, you could always leave it with me. I have a profound love of money and am more than willing to hold on very tightly to anyone's money. You may have problems with retrieval but, at least you'll know its gone to a good home.

Regards
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Old Jun 7th 2005, 1:30 am
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Default Re: Where do we put the dosh??

[QUOTE=Don]All the main banks eg ANZ / National allow non residents to get deposit a/cs with just a two percent non resident tax rate on your interest QUOTE]
I don't know where you get this 2% from but I pay 10% interest on my term deposits in NZ and I'm non resident. The NZ tax return clearly states what tax non residents pay according to which country they are tax resident in and the min is 10% (which applies to most countries which have a dual taxation agreement with NZ).
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Old Jun 7th 2005, 5:57 am
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Default Re: Where do we put the dosh??

[QUOTE=Kiwipaul]
Originally Posted by Don
All the main banks eg ANZ / National allow non residents to get deposit a/cs with just a two percent non resident tax rate on your interest QUOTE]
I don't know where you get this 2% from but I pay 10% interest on my term deposits in NZ and I'm non resident. The NZ tax return clearly states what tax non residents pay according to which country they are tax resident in and the min is 10% (which applies to most countries which have a dual taxation agreement with NZ).
AFAIK that's incorrect. NRWT is 10%, yes. However, you may elect to be taxed by the bank with what is known as 'Approved issuer status', in which case you are not taxed at 10% but at 2%, perfectly legally and with all NZ taxes paid, ie nothing more to declare.

See for example http://www.amico.co.nz/tax.htm

Last edited by Sue; Jun 8th 2005 at 2:22 pm. Reason: Article removed due to possible copyright infringement.
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Old Jun 8th 2005, 6:44 am
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Default Re: Where do we put the dosh??

I put my dosh in an Isle of Man Account. Low interest but no tax as opposed to higher interest and massive tax here in NZ. Personally I would not transfer cash to NZ at the moment as dollar is strong. Come and rent would be the best bet in my unprofessional opinion.
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Old Jun 8th 2005, 7:58 am
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Default Re: Where do we put the dosh??

Originally Posted by Don

A fixed establishment is a business, a BTL is seen as an investment not a business.

Looks like you owe me a pint.
Must admit I checked the links and they all look kosher, but I don't understand why the NZ gov only charge 2% on some investments and 10% on others. The only thing that comes to mind is if they are risky investments like venture capital in UK.

So I admit you seem to be correct.

But it wouldn't help me as if I paid only 2% tax in NZ the Oz gov would clobber me for the other 8% anyway as I can only claim a foriegn tax credit if I've actually paid the credit so I'll just leave things as they are.

Next time your in Brissy drinks are on me.
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Old Jun 8th 2005, 1:13 pm
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Default Re: Where do we put the dosh??

Originally Posted by Kiwipaul
Must admit I checked the links and they all look kosher, but I don't understand why the NZ gov only charge 2% on some investments and 10% on others. The only thing that comes to mind is if they are risky investments like venture capital in UK.

So I admit you seem to be correct.

But it wouldn't help me as if I paid only 2% tax in NZ the Oz gov would clobber me for the other 8% anyway as I can only claim a foriegn tax credit if I've actually paid the credit so I'll just leave things as they are.

Next time your in Brissy drinks are on me.
Aren't you a tax accountant by training?
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Old Jun 9th 2005, 8:55 am
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Default Re: Where do we put the dosh??

Originally Posted by Don
Aren't you a tax accountant by training?
No I'm an physicist by training but IT contractor by choice.

Just learnt about tax in NZ and Oz out of neccessity.
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