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Leaving proceeds of house sale in the UK for a while...

Leaving proceeds of house sale in the UK for a while...

Old Jul 29th 2016, 1:03 pm
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Default Leaving proceeds of house sale in the UK for a while...

Hello helpful people,

I'll soon () have the cash from selling my UK House and will only need some of it to fund our move. The rest ($300k ish) will be kept back to use as a deposit when we're ready to buy in the US.

With the low £ to $ exchange rate I'm tempted to leave most of it in the UK for now to see if it picks up. I wondered if others have experience of leaving a lump sum behind in the UK.

I know I can open an ISA before I go and, with low interest rates, I'm guessing no tax implications in the UK of the interest earnings from this as it won't be high. Probably need it in 9-12 months time so no point looking at long-term investments. What will the implications be in the US though? FBAR and reporting interest?

Any hints/tips/pitfalls appreciated
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Old Jul 29th 2016, 2:02 pm
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Default Re: Leaving proceeds of house sale in the UK for a while...

Originally Posted by carlrush View Post
Hello helpful people,

I'll soon () have the cash from selling my UK House and will only need some of it to fund our move. The rest ($300k ish) will be kept back to use as a deposit when we're ready to buy in the US.

With the low £ to $ exchange rate I'm tempted to leave most of it in the UK for now to see if it picks up. I wondered if others have experience of leaving a lump sum behind in the UK.

I know I can open an ISA before I go and, with low interest rates, I'm guessing no tax implications in the UK of the interest earnings from this as it won't be high. Probably need it in 9-12 months time so no point looking at long-term investments. What will the implications be in the US though? FBAR and reporting interest?

Any hints/tips/pitfalls appreciated
No problem in principle in leaving cash behind. Whether the GBP/USD rate will improve is anyone's guess. Cautious people would probably transfer it in two or three batches to spread the risk. I assume that you are aware of the transfer specialists like Transferwise, World First or TorFx (and there are many others) who will likely give you a better deal than the mainstream banks.

I don't understand your reference to (presumably cash) ISA. Isn't there a low limit for the amount you can invest in any one year?

In the US you will have FBAR reporting, Form 8938 reporting and tax on the interest. You may also have an exchange rate gain to report.
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Old Jul 29th 2016, 3:43 pm
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Default Re: Leaving proceeds of house sale in the UK for a while...

Thanks MidAtlantic, that's really helpful.

The ISA limit is fairly low, between my wife & I it would only stash $15k-ish but trying to get a decent rate is hard. I haven't looked yet but I'm guessing savings accounts are just as low in the US. What other options are there?

Interest rate is the unknown so will look to spread the transactions over as long a period of possible o give a chance of picking up on any £ to $ improvements.
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Old Jul 29th 2016, 4:08 pm
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Default Re: Leaving proceeds of house sale in the UK for a while...

GBP USD rate is historically low, I'm not sure it is going up any time soon. If you need the money transfer it, if you don't you can wait.
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Old Jul 29th 2016, 4:11 pm
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Default Re: Leaving proceeds of house sale in the UK for a while...

Originally Posted by sir_eccles View Post
GBP USD rate is historically low, I'm not sure it is going up any time soon. If you need the money transfer it, if you don't you can wait.
Hi - Like I said, I need some straight away but can wait 9-12 months for the rest. It's a gamble so will probably do it in chunks when (if!) the rate picks up.

I've got a feeling as the US Election gets closer and Trump is up there in the opinion polls the market will react but who knows!
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Old Jul 29th 2016, 4:41 pm
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Default Re: Leaving proceeds of house sale in the UK for a while...

Originally Posted by carlrush View Post
Thanks MidAtlantic, that's really helpful.

The ISA limit is fairly low, between my wife & I it would only stash $15k-ish but trying to get a decent rate is hard. I haven't looked yet but I'm guessing savings accounts are just as low in the US. What other options are there
For free cash, 1% with an on-line savings account is about as good as it gets.
A one-year CD ("bond" in England) would get around 1.25% if you are willing to tie up money for a year.

This website may be helpful to research your options:

https://www.depositaccounts.com/
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Old Jul 30th 2016, 7:09 pm
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Default Re: Leaving proceeds of house sale in the UK for a while...

Originally Posted by MidAtlantic View Post
For free cash, 1% with an on-line savings account is about as good as it gets.
A one-year CD ("bond" in England) would get around 1.25% if you are willing to tie up money for a year.

This website may be helpful to research your options:

https://www.depositaccounts.com/
Thanks, that's really helpful. The ISA allowance is just over £15k a year so for my wife & I that's $40k so not bad. Also, shopped around and found 1.3%.
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