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Advice needed: I want to buy a house when I return to the UK

Advice needed: I want to buy a house when I return to the UK

Old Nov 26th 2010, 3:43 pm
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Default Advice needed: I want to buy a house when I return to the UK

Hi

I am in the US for 2 years (arrived here in September on an L1). When I return to the UK, I want to buy a house within 6 - 12 months of returning and am wondering about the best way to go about minimising the impact of being here on my credit rating, and saving for the deposit and fees...

I have retained several accounts in the UK, and am running them well, sending money home on a monthly basis to keep payments up (ie mobile phone contract, credit cards which I am continuing to use and pay off) with the intention that I wont have a gaping hole in my credit history when I get back (I realise that moving over here and not being on the electoral roll will probably hurt though!). Does this sound right? Or is it a waste of time?

I am also in a position to save money, but am confused by tax issues... if I send money home regularly to the UK to save in my UK account (I know I'm not allowed to set up a high interest account as a non resident, so it'd just be in my current account which earns more interest than my US current account), am I in violation of any tax rules? If I take the other route and save money in the US, I'm going to need to invest in an Exchange Traded Fund or Mutual Fund since bank accounts don't offer any interest. If I save in this way, and then take money home with me at the end of my time here, am I going to get hit by a big tax bill? I'm not talking about millions, hopefully around £10 - 15K.

I hope this makes sense as a question, I'm a bit jumbled in my head so I can understand if I need to add more info...

Thanks!
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Old Nov 26th 2010, 6:23 pm
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Default Re: Advice needed: I want to buy a house when I return to the UK

You can open an account at a bank in the Isle of Man. Some savings accounts there (for instance, some with a one or two year commitment) are now paying between 2% and 3% interest.
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Old Dec 2nd 2010, 2:19 pm
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Default Re: Advice needed: I want to buy a house when I return to the UK

You stole my name
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Old Dec 2nd 2010, 6:37 pm
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Default Re: Advice needed: I want to buy a house when I return to the UK

Originally Posted by lazza View Post
Hi

I am in the US for 2 years (arrived here in September on an L1). When I return to the UK, I want to buy a house within 6 - 12 months of returning and am wondering about the best way to go about minimising the impact of being here on my credit rating, and saving for the deposit and fees...

I have retained several accounts in the UK, and am running them well, sending money home on a monthly basis to keep payments up (ie mobile phone contract, credit cards which I am continuing to use and pay off) with the intention that I wont have a gaping hole in my credit history when I get back (I realise that moving over here and not being on the electoral roll will probably hurt though!). Does this sound right? Or is it a waste of time?

I am also in a position to save money, but am confused by tax issues... if I send money home regularly to the UK to save in my UK account (I know I'm not allowed to set up a high interest account as a non resident, so it'd just be in my current account which earns more interest than my US current account), am I in violation of any tax rules? If I take the other route and save money in the US, I'm going to need to invest in an Exchange Traded Fund or Mutual Fund since bank accounts don't offer any interest. If I save in this way, and then take money home with me at the end of my time here, am I going to get hit by a big tax bill? I'm not talking about millions, hopefully around £10 - 15K.

I hope this makes sense as a question, I'm a bit jumbled in my head so I can understand if I need to add more info...

Thanks!
No tax problems - the money to ship to the UK will be money you earned whilst resident in the US and has already been taxed as income. (I assume you did the P85 form before you left the UK?)

If it generates interest in the UK you are generating a "profit" on this money - it will need to be taxed in the UK (and bank int is often 20% taxed at source) and you will need to complete a UK self-assessment tax return (and will probably get a rebate due to the circa GBP7K personal allowance and at-source taxing).

You will also need to declare the profit (interest earned) from this UK money on your US tax return (and declare any net tax paid in the UK) in your US return (this can be a pain as the tax years are obviously different).

I have not heard of not being allowed to open a UK high-interest account - I have several and have opened some recently (using parents address in the UK).
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