Gbp Sterling

[BalthazarBeefheart]

Well with all due respect, that is not answering the question.

We hear a lot about people arriving in Thailand with a fanfare blasting out their arrival - Departures are almost always very quiet.

Moving money out of your home currency (and unless we have resident permit/Thai citizenship we are guests) is always taking a risk of having burned bridges if the currency back home becomes un affordable.

The more I read here the more I am convinced few understand risk, risk assessment and risk management.

I have read your posts with interest - you seem to be satsified with holding your savings in sterling, owning a property in the UK and investing in the Chinese stock market. I dont have access to the financial advisers that you also do but one thing I do know is no-one in their right mind would be advising any of those as investments at the moment.

But what do I know - I think the OP was aiming this topic at British expats who wished to remain in Thailand and thus needed to hedge against currency fluctuations so we dont end up like our American cousins. I think you have missed the point but are rather to smug to notice.

Cheers BB

[GuestHouse]

I have read your posts with interest - you seem to be satsified with holding your savings in sterling, owning a property in the UK and investing in the Chinese stock market. I dont have access to the financial advisers that you also do but one thing I do know is no-one in their right mind would be advising any of those as investments at the moment.

I'm very satisfied with leaving my savings in sterling - unless you are suggesting I should call up my pension fund and withdraw the cash to buy a mix of foreign currencies - Nope, I'll leave my pensions where they are thanks.

A house in the UK is three things - An investment (that has since the end of WWII outstripped bank interest rates, and pay rises), if it is not being used by the owner it is a source of rental income AND it is a place to return to if things go to rat shit.

So an investment, an income and security.

I'm not saying I would buy a house now, land might be better, but if you've owned a house in the UK for more than a handful of years then that house is a very good asset.

The Chinese stock market, well its doing very well right now. The high risk period is the first year of investment, but like house prices, once a significant gain has been made, and gains have been significant over the last three years, then anything but an instantaneous melt down is almost certainly only going to cut profits, not cut invested capital. - But I do admit, not for the feint of heart.

But what do I know - I think the OP was aiming this topic at British expats who wished to remain in Thailand and thus needed to hedge against currency fluctuations so we dont end up like our American cousins.

And like I have argued, leaving money secure in the UK and using the tax free investment vehicles available in the UK can and does produce a very good hedge against currency fluctuations in that high tax free returns are far more certain than playing the money markets.

I think you have missed the point but are rather to smug to notice.

I know, you're sore that your point about Northern Rock was a home goal.

But anyway, you chose to cut and paste a post above that points out the very real dangers of removing yourself from your home currency but seem to have completely missed the caution it includes with respect to burning bridges.

Its one thing not to be able to afford to stay in Thailand - Its quite another not to be able to go home if you desperately need to.

Cheers BB

Edited December 9, 2007 by GuestHouse

[GuestHouse]

I think rather than get into personal attacks on what after all is personal outlook.

I'll expand on other aspects of price change (currency fluctuations/inflation etc) that I certainly am invested in an I suspect anyone who holds a pension or stock exchange investments is also invested in.

Investment in international markets.

Buying currency is a hedge strategy, but the gains and losses are only determined by currency movements and interest (interest is at this moment in time in single figures around the world - So its really down to currency movement - and that can go both ways).

Investing in the international stock markets (I personally invest in Unit Trusts) offers both ownership of foreign currencies AND the benefits of stock growth. Of course that is a risk, but spreading investments across the more reputable investment trusts (and taking advantage of the range of different risk levels many investment trusts offers helps the investor manage his maximum risk).

As I have said, I have invested in China, this has done very well and yes it is risky, but also looming on the horizon is the likelihood of the Chinese raising the value of their currency (I mentioned above that China is running into trouble with purchasing food one of may pressures on the currency). So perhaps a windfall there.

Likewise I have invested in Emerging markets in the new EU nations, and South America all doing very well - a spread of investments a spread of currencies.

But all held in £ Sterling and all within the tax free vehicles the UK offers AND all covered by the excellent financial protections the UK offers.

Those investments might not suit everyone, age, capital and income profiles all need to be considered, as does personal temprament. I know one person who invested £2000 on the UK stock market and nearly had a nervous break down with worry - Investments carry risk and risk is not for everyone.

I've run a calculation of how much I would have to put outside of Sterling to maintain what I regard as acceptable living standards in Thailand if the £ dropped by 50% (as has the $) - The result is a significant amount of money. Money that invested in a range of low risk Unit trusts would almost certainly produce a return that outstrips all but the most rapid melt down in currency exchanges - and and would in any case be spread across several stock markets and hence economies/currencies.

[BalthazarBeefheart]

I think rather than get into personal attacks on what after all is personal outlook.

I'll expand on other aspects of price change (currency fluctuations/inflation etc) that I certainly am invested in an I suspect anyone who holds a pension or stock exchange investments is also invested in.

Investment in international markets.

Buying currency is a hedge strategy, but the gains and losses are only determined by currency movements and interest (interest is at this moment in time in single figures around the world - So its really down to currency movement - and that can go both ways).

Investing in the international stock markets (I personally invest in Unit Trusts) offers both ownership of foreign currencies AND the benefits of stock growth. Of course that is a risk, but spreading investments across the more reputable investment trusts (and taking advantage of the range of different risk levels many investment trusts offers helps the investor manage his maximum risk).

As I have said, I have invested in China, this has done very well and yes it is risky, but also looming on the horizon is the likelihood of the Chinese raising the value of their currency (I mentioned above that China is running into trouble with purchasing food one of may pressures on the currency). So perhaps a windfall there.

Likewise I have invested in Emerging markets in the new EU nations, and South America all doing very well - a spread of investments a spread of currencies.

But all held in £ Sterling and all within the tax free vehicles the UK offers AND all covered by the excellent financial protections the UK offers.

Those investments might not suit everyone, age, capital and income profiles all need to be considered, as does personal temprament. I know one person who invested £2000 on the UK stock market and nearly had a nervous break down with worry - Investments carry risk and risk is not for everyone.

I've run a calculation of how much I would have to put outside of Sterling to maintain what I regard as acceptable living standards in Thailand if the £ dropped by 50% (as has the $) - The result is a significant amount of money. Money that invested in a range of low risk Unit trusts would almost certainly produce a return that outstrips all but the most rapid melt down in currency exchanges - and and would in any case be spread across several stock markets and hence economies/currencies.

Thanks so much for taking the trouble to state such a reasoned argument - I still am undecided on all this - but wish someone could explain to me how sterling has fallen around 6% against most major currencies apart from USD since last July but has remained steady against the Baht.

Cheers BB

[Prakanong]

"Those investments might not suit everyone, age, capital and income profiles all need to be considered, as does personal temprament. I know one person who invested £2000 on the UK stock market and nearly had a nervous break down with worry - Investments carry risk and risk is not for everyone. "

Tell me about it - one of the managers sitting close to me at work chose to invest in one of the funds i have some money in - an Asia Growth Fund

Well of course I has had its ups and downs in the recent market but not too wild - well not for me but for her its too much (swings of a few hundred SGD each way for her amount).

Now she has me tracking it for her and as soon as she can get her capital back taking into account any selling charges (she also paid purchase charges of 5% I think it was) she will sell and put it into a fixed interest rate investment.

[ace]

And all those tax contributions to pensions are guaranteed - That is 40% contributed by the tax man (a certainty) not a possibility of making money on the money markets.

I agree with you on pretty much everything, as a UK citizen saving in the UK is advisable, although currency diversification is advisable for an expat ( I hold US $ . but more AUS $ & want some CHF next year) But I am not sure the pension advice is quite right. Pensions are paid tax free in advance, ie 20% for a basic rate tax-payer paid up front in addition to the gross contribution up to a max of 100% of UK earnings or about 3.6k if no earnings. 40% would be for a higher rate tax-payer. Also it is important to remember that tax is then paid when the pension is taken. So it makes a lot of sense to contribute to a pension as a high rate tax payer then take it as an expat at 0 to 20%. One caveat is that pension funds (especially my one) tend to be poor performers. My ISAs wipe the floor with my pension fund.

Cheers,

Ace

[Naam]

Well with all due respect, that is not answering the question.

We hear a lot about people arriving in Thailand with a fanfare blasting out their arrival - Departures are almost always very quiet.

Moving money out of your home currency (and unless we have resident permit/Thai citizenship we are guests) is always taking a risk of having burned bridges if the currency back home becomes un affordable.

The more I read here the more I am convinced few understand risk, risk assessment and risk management.

i can't answer your question as i have no idea who moved in and out of Thailand.

"moving out of the home currency" was (until now) not such a bad idea for those who invested in Thai Baht. it was only a bad idea of those who moved out of their home currency into the US-Dollar (except those who changed Zimbabwe Dollars into US-Dollars)

i conclude from your statements (with due respect and no offence meant!) that your ideas of risk assessment and risk management depend exclusively on the advice of third parties quoted and not your own.

[ukjackthai]

Idealism!

100% cash in GBP 6.51% AER offshore. Only transfer (spending money) to LOS when THB/GBP rates are high.

Practicle? or stupid?

[GuestHouse]

i conclude from your statements (with due respect and no offence meant!) that your ideas of risk assessment and risk management depend exclusively on the advice of third parties quoted and not your own.

Shhh ... keep it quiet, if my boss finds out he'll stop paying me for pretending to know something about risk.

I agree with you on pretty much everything, as a UK citizen saving in the UK is advisable, although currency diversification is advisable for an expat ( I hold US $ . but more AUS $ & want some CHF next year) But I am not sure the pension advice is quite right. Pensions are paid tax free in advance, ie 20% for a basic rate tax-payer paid up front in addition to the gross contribution up to a max of 100% of UK earnings or about 3.6k if no earnings. 40% would be for a higher rate tax-payer. Also it is important to remember that tax is then paid when the pension is taken. So it makes a lot of sense to contribute to a pension as a high rate tax payer then take it as an expat at 0 to 20%. One caveat is that pension funds (especially my one) tend to be poor performers. My ISAs wipe the floor with my pension fund.

You are correct, the tax benefits of UK pensions are dependent upon the highest rate of tax the pension contribitor holds - but don't forget, money going in at tax free means that the growth is the tax free enhanced investment and most personal pension funds do allow the investor to select a wide range of markets/funds to invest in.

Also, under the current tax laws people with Personal pensions are allowed to take a tax free lump sum of up to 25% of their total pension fund when they retire.

And as I stated above, it is possible for an investor to have the tax man pay into his pension despite the investor being outside of the UK and outside of the UK tax system provided he meets certain rules regarding 'reasons for being overseas'.

[GuestHouse]

Idealism!

100% cash in GBP 6.51% AER offshore. Only transfer (spending money) to LOS when THB/GBP rates are high.

Practicle? or stupid?

While I don't see the need to put money offshore - tax free and feeless accounts are available on the mainland with better interest rates.

But in all other respects this is a good policy.

The Thai Baht is up and down like a tarts draws over any 12 month period. Just buy when you are happy with the rate.

And Is offshore really safe from the Tax-Man?

Edited December 10, 2007 by GuestHouse

[camerata]

100% cash in GBP 6.51% AER offshore. Only transfer (spending money) to LOS when THB/GBP rates are high.

This is what I am planning to do for my retirement. But my worry is the pound might drop and stay low against the baht for a longer period than I can handle. If only there was something worth investing in in Thailand.

[JimsKnight]

Wow the posts are going back and forth here! Good thread!

Guesthouse flys the flag for the sterling stalwats while Dr N. and his quirky crew jump about hullabooing about offshore strategies.

Keep flying that flag GH you've made some interesting points!

[chiang mai]

Interesting to note that onshore fixes in the UK have now reached 6.91% for 6 months whereas offshore haven't yet reached that level - this despite the quarter point cut last week. But regardless, GBP is down 7% against the Euro so far this year so despite that interest income GBP is still worth less over the course of the year - 2008 will be interesting in that respect.

[BalthazarBeefheart]

Interesting to note that onshore fixes in the UK have now reached 6.91% for 6 months whereas offshore haven't yet reached that level - this despite the quarter point cut last week. But regardless, GBP is down 7% against the Euro so far this year so despite that interest income GBP is still worth less over the course of the year - 2008 will be interesting in that respect.

Disturbing fact that deposits are so much higher than the base rate - I guess because banks are unwilling to lend to each other following this US sub-prime fiasco. Personally, I think people will be ok for a while longer with sterling as the B of E won't be able to lower interest rates because of inflationary pressures. I note that no-one has explained why GBP/THB has remained static when sterling has fallen against the euro and many other leading currencies - surely that is what needs explaining here ? Anyone ?

Cheers BB

[lannarebirth]

Interesting to note that onshore fixes in the UK have now reached 6.91% for 6 months whereas offshore haven't yet reached that level - this despite the quarter point cut last week. But regardless, GBP is down 7% against the Euro so far this year so despite that interest income GBP is still worth less over the course of the year - 2008 will be interesting in that respect.

Disturbing fact that deposits are so much higher than the base rate - I guess because banks are unwilling to lend to each other following this US sub-prime fiasco. Personally, I think people will be ok for a while longer with sterling as the B of E won't be able to lower interest rates because of inflationary pressures. I note that no-one has explained why GBP/THB has remained static when sterling has fallen against the euro and many other leading currencies - surely that is what needs explaining here ? Anyone ?

Cheers BB

Here's my guess. I don't think there exists a GBP:THB trade. I think the trade is USD:THB and GBP:USD, The USD has been flat aginst the THB of late and the GBP is currently trading in the middle of it's recent range against the USD. That may give the appearance of the GBP remaining flat against the THB.

[chiang mai]

Interesting to note that onshore fixes in the UK have now reached 6.91% for 6 months whereas offshore haven't yet reached that level - this despite the quarter point cut last week. But regardless, GBP is down 7% against the Euro so far this year so despite that interest income GBP is still worth less over the course of the year - 2008 will be interesting in that respect.

Disturbing fact that deposits are so much higher than the base rate - I guess because banks are unwilling to lend to each other following this US sub-prime fiasco. Personally, I think people will be ok for a while longer with sterling as the B of E won't be able to lower interest rates because of inflationary pressures. I note that no-one has explained why GBP/THB has remained static when sterling has fallen against the euro and many other leading currencies - surely that is what needs explaining here ? Anyone ?

Cheers BB

Agreed that the short term rates, six months to one year seem geared towards gaining funds to compensate in part for the lack of liquidity - rates beyond twelve months seem to be gambling that things will return to "normal" beyond that time frame.

As far as the BOE lowering rates any further, I think that it was summed up fairly accurately by one commentator who said that the MPC was walking along a ridge in a blinding snow storm. My guess is that the BOE will err on the side of the economy going down the pan versus things costing too much hence more rate cuts in the future.

And GBP/THB: well the rate has fallen from 70 (plus points) to 68.65 on a TT basis as of today (BB). Granted that is not a proportional move given events but doubt that there's anyone on this forum who can accurately answer your question - I live in hope however.

[chiang mai]

Interesting to note that onshore fixes in the UK have now reached 6.91% for 6 months whereas offshore haven't yet reached that level - this despite the quarter point cut last week. But regardless, GBP is down 7% against the Euro so far this year so despite that interest income GBP is still worth less over the course of the year - 2008 will be interesting in that respect.

Disturbing fact that deposits are so much higher than the base rate - I guess because banks are unwilling to lend to each other following this US sub-prime fiasco. Personally, I think people will be ok for a while longer with sterling as the B of E won't be able to lower interest rates because of inflationary pressures. I note that no-one has explained why GBP/THB has remained static when sterling has fallen against the euro and many other leading currencies - surely that is what needs explaining here ? Anyone ?

Cheers BB

Here's my guess. I don't think there exists a GBP:THB trade. I think the trade is USD:THB and GBP:USD, The USD has been flat aginst the THB of late and the GBP is currently trading in the middle of it's recent range against the USD. That may give the appearance of the GBP remaining flat against the THB.

I agree that's probably the most logical and sensible answer.

[GuestHouse]

The Bht/£ rate doesn't look very flat to me.

But look at that histogram again and you'll notice the Bht starts high, goes low, back up again, down again.....

It has done this for as long as I have been watching the Bht/£ exchange rate - And this is I believe one of the best hedges against rate changes - buy when the Bht is cheap (essentially after every Thai Government idiot policy change).

This is what ukjackthai was referring to above.

[BalthazarBeefheart]

The Bht/£ rate doesn't look very flat to me.

But look at that histogram again and you'll notice the Bht starts high, goes low, back up again, down again.....

It has done this for as long as I have been watching the Bht/£ exchange rate - And this is I believe one of the best hedges against rate changes - buy when the Bht is cheap (essentially after every Thai Government idiot policy change).

This is what ukjackthai was referring to above.

I think maybe there is something wrong with the data because in January it shows the average exchange rate as being around 69 which is similar to the TT rate of banks however now the average is now 61 but the TT rate is around 68.

Cheers BB

[chiang mai]

Referring back to the earlier post about there being no trade in THB/GBP and that USD is the link, try reading the attached RBS report on the future of USD, ominously entitled, "the dollar demise" because it does offer some clues in respect of THB. Of particular interest is the fact that USD will NOT bounce back from its current levels and that currency levels must be viewed on a trade weighted basis.

The_dollar_s_demise__external.pdf

Edited December 11, 2007 by chiang mai

[fletchsmile]

Its not some inbuilt ability JK. As part of my overseas assignment package I receive free (company paid) access to one of the world's leading tax and investment advisory firms.

Their advice has been consistent - I don't need to put savings off shore to protect myself against tax. I should maintain my savings in my home currency (home being where I'll head if life goes to rat sh1t) and I should take advantage of the trust laws to ensure my family's future is protected.

Of course individual circumstances are different but my bet is that the fundamentals of the advice I have been given is good for everyone except for those with no savings and the super rich.

i beg to differ and claim this is not good advice. in case "life goes to rat sh*t" and you are heading "home" you are standing in front of the UK taxman not only with your trousers but also with your undies down and he will ask for his cut ... unless you have moved your assets out of his reach before moving back. that's something which is not possible in Germany as the records of your holdings still exist as well as the trail to the location you moved them. and in this case the german taxman won't believe fairy tales that all the dough was spent on sick buffaloes

I think you may also be talking different amounts as well. Bear in mind in UK there are also some pretty complex rules, where even non-residents are captured, when it arises from UK. Unless you are saying that you have everything in trust: Some examples:

- remittance basis, may apply for non-residents, where you are paid in the UK by or on behalf of a person in UK (NB paid outside = not liable)

- income from property in UK depends on where you were resident 6 Apr 1996, often still taxable

- investment income arising in UK may be liable regardless of whether you're non-resident

These can often be set against your personal allowance, but this is only around 5k. So for many people with investment income or property income in UK, exceeding 5k it is taxable, regardless of non-resident or not. Unless of course in trust. Trusts also incur set up/legal costs

Useful website:

http://www.hmrc.gov.uk/pdfs/ir20.htm

I still have ties to the UK. But I differentiate between what's liquid and not. Obviously I don't move pensions. But investments which provide taxable investment income, cash etc I view as movable

Edited December 11, 2007 by fletchsmile

[BalthazarBeefheart]

The Bht/£ rate doesn't look very flat to me.

But look at that histogram again and you'll notice the Bht starts high, goes low, back up again, down again.....

It has done this for as long as I have been watching the Bht/£ exchange rate - And this is I believe one of the best hedges against rate changes - buy when the Bht is cheap (essentially after every Thai Government idiot policy change).

This is what ukjackthai was referring to above.

I think maybe there is something wrong with the data because in January it shows the average exchange rate as being around 69 which is similar to the TT rate of banks however now the average is now 61 but the TT rate is around 68.

Cheers BB

Guesthous sorry I am still waiting for an explanation as to what looks to be misleading information - incidentally as well do you receive income in THB ? I just guess that kind of helps mitigate exchange rate risk.

Cheers BB

[cmsally]

For the onshore rate this gives you a better idea of the rates.

SCB Previous exchange rates

I am not so sure about starting high and ending low because if you go back the last couple of years it was also high at the end of preceding years. So general trend is down.

[GuestHouse]

Guesthous sorry I am still waiting for an explanation as to what looks to be misleading information.

I would suggest you contact the X-rates Website. I don't manage their information and hence cannot account for any errors.

incidentally as well do you receive income in THB ? I just guess that kind of helps mitigate exchange rate risk

I receive some rental income in THB, enough to pay for my holidays when I'm in Thailand - This is from three rented properties the higher income one being where I would live if I were working in Thailand right now - So pays for holidays but if I moved back to work in Thailand I'd loose that particular hedge.

All my other income is in GBP, excepting my local living allowances here in Saudi Arabia which are paid in SAR.

[GuestHouse]

I think you may also be talking different amounts as well. Bear in mind in UK there are also some pretty complex rules, where even non-residents are captured, when it arises from UK. Unless you are saying that you have everything in trust: Some examples:

- remittance basis, may apply for non-residents, where you are paid in the UK by or on behalf of a person in UK (NB paid outside = not liable)

- income from property in UK depends on where you were resident 6 Apr 1996, often still taxable

- investment income arising in UK may be liable regardless of whether you're non-resident

These can often be set against your personal allowance, but this is only around 5k. So for many people with investment income or property income in UK, exceeding 5k it is taxable, regardless of non-resident or not. Unless of course in trust. Trusts also incur set up/legal costs

Useful website:

http://www.hmrc.gov.uk/pdfs/ir20.htm

I still have ties to the UK. But I differentiate between what's liquid and not. Obviously I don't move pensions. But investments which provide taxable investment income, cash etc I view as movable

I agree with much of what you say, but I think you've missed some important factors, for example the tax free allowances relating to Capital Gains which in this financial year are around £9200 per person. If you are married with a couple of children that is a significant tax free sum for the family.

Tursts do incure costs, but they can be used to avoid two other nasties - Taxes and 'disipation' of assets - As I often post in my advice on making a will.

[BalthazarBeefheart]

Guesthous sorry I am still waiting for an explanation as to what looks to be misleading information.

I would suggest you contact the X-rates Website. I don't manage their information and hence cannot account for any errors.

incidentally as well do you receive income in THB ? I just guess that kind of helps mitigate exchange rate risk

I receive some rental income in THB, enough to pay for my holidays when I'm in Thailand - This is from three rented properties the higher income one being where I would live if I were working in Thailand right now - So pays for holidays but if I moved back to work in Thailand I'd loose that particular hedge.

All my other income is in GBP, excepting my local living allowances here in Saudi Arabia which are paid in SAR.

I will try to be polite. Firstly, if you are going to publish information please check it first. Secondly, I have tried to state that old adage "Don't put your eggs in the same basket" namely GBP - which you have argued strongly against but now reveal your assets are very diversified. I do hope for your sake that these financial advisers you have free access to are gainfully employed like yourself posting on Thai visa rather than investing your GBP in Ninja.

Cheers BB

[fletchsmile]

I think you may also be talking different amounts as well. Bear in mind in UK there are also some pretty complex rules, where even non-residents are captured, when it arises from UK. Unless you are saying that you have everything in trust: Some examples:

- remittance basis, may apply for non-residents, where you are paid in the UK by or on behalf of a person in UK (NB paid outside = not liable)

- income from property in UK depends on where you were resident 6 Apr 1996, often still taxable

- investment income arising in UK may be liable regardless of whether you're non-resident

These can often be set against your personal allowance, but this is only around 5k. So for many people with investment income or property income in UK, exceeding 5k it is taxable, regardless of non-resident or not. Unless of course in trust. Trusts also incur set up/legal costs

Useful website:

http://www.hmrc.gov.uk/pdfs/ir20.htm

I still have ties to the UK. But I differentiate between what's liquid and not. Obviously I don't move pensions. But investments which provide taxable investment income, cash etc I view as movable

I agree with much of what you say, but I think you've missed some important factors, for example the tax free allowances relating to Capital Gains which in this financial year are around £9200 per person. If you are married with a couple of children that is a significant tax free sum for the family.

Tursts do incure costs, but they can be used to avoid two other nasties - Taxes and 'disipation' of assets - As I often post in my advice on making a will.

All the above I mentioned were as you say on income tax. I only gave examples on income tax. I didn't touch on capital gains tax, inheritance tax etc.

Reason being: Apart from tax being such a wide topic, there are fewer instances of capital gains arising in the UK, for non-resident and ordinarily non-resident. i.e usually not applicable. Danger with capital gains tax is more if you return to UK and become resident again. Gains for several years can crystallise in a single year, unlike income tax which usually has a single year basis.

You should check again with your advisor on capital gains tax. Key factors include date of non-residency i.e pre/post 1998. Another is that if you are not resident and not ordinarily resident you would usually not be liable on capital gains tax, so the allowances you mention wouldn't be applicable. Those are capital allowances for UK residents.

Note: I have to use words like usually and normally, as there are exceptions, eg assets held for trade, vocation of an agency or branch could be taxable even if non-relevant.

[BalthazarBeefheart]

I think you may also be talking different amounts as well. Bear in mind in UK there are also some pretty complex rules, where even non-residents are captured, when it arises from UK. Unless you are saying that you have everything in trust: Some examples:

- remittance basis, may apply for non-residents, where you are paid in the UK by or on behalf of a person in UK (NB paid outside = not liable)

- income from property in UK depends on where you were resident 6 Apr 1996, often still taxable

- investment income arising in UK may be liable regardless of whether you're non-resident

These can often be set against your personal allowance, but this is only around 5k. So for many people with investment income or property income in UK, exceeding 5k it is taxable, regardless of non-resident or not. Unless of course in trust. Trusts also incur set up/legal costs

Useful website:

http://www.hmrc.gov.uk/pdfs/ir20.htm

I still have ties to the UK. But I differentiate between what's liquid and not. Obviously I don't move pensions. But investments which provide taxable investment income, cash etc I view as movable

I agree with much of what you say, but I think you've missed some important factors, for example the tax free allowances relating to Capital Gains which in this financial year are around £9200 per person. If you are married with a couple of children that is a significant tax free sum for the family.

Tursts do incure costs, but they can be used to avoid two other nasties - Taxes and 'disipation' of assets - As I often post in my advice on making a will.

All the above I mentioned were as you say on income tax. I only gave examples on income tax. I didn't touch on capital gains tax, inheritance tax etc.

Reason being: Apart from tax being such a wide topic, there are fewer instances of capital gains arising in the UK, for non-resident and ordinarily non-resident. i.e usually not applicable. Danger with capital gains tax is more if you return to UK and become resident again. Gains for several years can crystallise in a single year, unlike income tax which usually has a single year basis.

You should check again with your advisor on capital gains tax. Key factors include date of non-residency i.e pre/post 1998. Another is that if you are not resident and not ordinarily resident you would usually not be liable on capital gains tax, so the allowances you mention wouldn't be applicable. Those are capital allowances for UK residents.

Note: I have to use words like usually and normally, as there are exceptions, eg assets held for trade, vocation of an agency or branch could be taxable even if non-relevant.

So keeping on topic does that mean that gains in foreign currency deposits held in a UK bank are not liable to capital gains tax for a non-resident ?

Cheers BB

[GuestHouse]

I will try to be polite. Firstly, if you are going to publish information please check it first. Secondly, I have tried to state that old adage "Don't put your eggs in the same basket" namely GBP - which you have argued strongly against but now reveal your assets are very diversified.

I'm not going to post a list of my assets. But I do assure you that my assets are almost entirely UK based. Where I hold investmets overseas they are held through UK based funds (Are in GBP and under UK Law - Particularly UK Trust Law). The exception being some property in Thailand, the combined purchase price of which was less than I paid for an extension over my garrage in the UK.

And as I have consistantly said - The basis for me maitaining the vast majroity of my assets in GBP is twofold - First and Foremost - If for my life goes to rat-sh1t (read my signature line) then I'll go home to the UK where I own property that cannot be taken off me, where I have Solid Investments that will provide me with an income to keep me living very comfortably in the UK, where I have access to FREE health care, free social services and where I have inaliable rights of residence.

The second reason I hold my assets in GBP is the raft of first class financial protections the UK offers.

I do not move my assets away from taxes in the UK because I do not have to - Period!

I do hope for your sake that these financial advisers you have free access to are gainfully employed like yourself posting on Thai visa rather than investing your GBP in Ninja.

Cheers BB

1. These advisors do not invest any of my money thanks - They advise me on how to legally avoid taxes and on legal ways of controlling my savings to the best advantage of myself and my family.

2. They are gainfully employed - Or at least the have saved me a lot of taxes.

3. Access to all but approved websites is blocked on our office network during business hours - So I'm gainfully employed and posting on TV - but not at the same time.

Edited December 13, 2007 by GuestHouse

[chiang mai]

Some members on this board have said that the future for Sterling looks ugly and having just read an article in The Nation (copied from The Observer) it seems the future is nearly here. The article suggests that The Pound is now being sold quite heavily and has fallen over 6% against The Euro in the past month. The BOE is almost certainly going to cut rates in December or January since the UK has high exposure resulting from Sub Prime. The commentator suggested that the currency rot would set in sometime in early 2008.

I wonder what strategies other Brits have who are Thailand based to manage the currency fluctuations and a currency conversion rate that could conceivably hit, I don't know, say sub 60 Baht to the Pound? For my part I have fixed 60% of my GBP funds at 6.5% for two years. The remainder is available at short notice and due to a timing issue I currently have only minimal funds in Baht.

May we keep the focus on Pound Sterling and not USD please.

Sorry to have fallen asleep during the debate on GH's financial strategy but I just read an article in this weeks Phuket Gazette that talked about GBP heading for 50 tp GBP, just in case anyone forgot what the topic is really about! 50 to the Pound, can you fathom it, I'm just really pleased that the phuketpiehouse pie business is brisk.

Just one last point for GH: all I can suggest to you is that you look very closely at the advice of your financial advisors!

Edited December 16, 2007 by chiang mai