pollybegoode

Hello,

We recently moved back to the UK from the US. We are trying to figured out a savings plan for the money we have in our account in the UK as we want to purchase a house in a year or two. I have UK and US citizenship and so I'm struggling to find a fixed term savings account because of having two tax residences. Any suggestions from the BritExpat community would be gratefully appreciated!

Thanks in advance

dunroving

I don't know how it works with regards tax, but for a short-term, flexible option, take a look at premium bonds. £50k maximum per person, and prizes are tax-free, no matter how big. The nominal prize rate (equivalent to interest rate if you have a large amount invested) is usually quite competitive for a flexible investment.

durham_lad

+1 on premium bonds.

we also have savings in other NS&I savings accounts and bonds, like premium bonds the principal is fully backed by the UK Treasury
https://www.nsandi.com/home-page

Another good place to research good interest bearing accounts is Martin Lewis, Money Saving Expert.

https://www.moneysavingexpert.com/

pollybegoode

thank you so much for this advice. I’m going to do some research today!

Twitcher1958

I don’t think you can be tax resident in two places, can you? It sounds like you’re in transition so perhaps still have some ‘stuff’ in the US. Citizenship is different to tax residency - once you’re back in the UK to stay, your tax residency is the UK although you may have loose ends to tie up in the US.

durham_lad

As a US citizen you are always considered tax resident in the USA. The USA is the only country in the world apart from Eritrea that taxes its citizens on their worldwide income regardless of where they reside.

The UK has a tax treaty with the USA but if you live in the UK you are still taxed in both countries and have to use foreign tax credits to reduce the tax burden.

Twitcher1958

I stand corrected. I did know that but as it doesn’t apply to me, I’d conveniently forgotten.

Pulaski

Technically PBs are not legal for USC's (they are seen as a type of gambling, which is very tightly regulated in the US), but if you're willing to ignore the issues in completing a US tax return and supporting forms, and punitive taxes on some types of investments in the UK (non-IRS-compliant unit trusts for example), PBs may be a good option.

pollybegoode

Thanks everyone. It's a bit of a pain, but part of being a dual citizen I suppose. I'll just have to leave our money where it is for now and figure out next steps once we settle a bit. thanks for your input!