Banking Question For Brits In Los

[Steve2UK]

I'm a month or so away from moving to LOS from the UK. I'm already set up a while back with Nationwide for ATM purposes (good exchange rate and no fee) and have it linked to a Royal Bank of Scotland account that I will probably keep (at least to receive UK rental income - which is taxable), but I'm now looking around for where's best to stash my cash to get the maximum net rate of interest once I've left the UK. While still in the UK, I've been keeping about £50k in an onshore building society account (Bradford & Bingley e-Savings) - currently generating 4.85% but, of course, that's currently subject to tax (20% in my case). Once I'm in LOS near enough 12 months a year, I'll have the option to go for an offshore account - but nearly all the rates I've seen are under 4% and/or saddled with restrictions and charges/penalties (e.g. for more than x withdrawals per year) - so it looks like there's not a massive benefit in going offshore with the likes of Nationwide, Royal Bank of Scotland, Bradford & Bingley etc.

I want to be able to channel money from a good interest-paying account to my Nationwide Flex-Account to draw in LOS as and when I need to. Any recommendations from Brits in a similar position - maybe a sterling account somewhere other than IOM, Jersey etc - preferably internet-managed? I'm happy to receive PM's with suggestions of "under the radar" options - as long as they're dependable. BTW, I'm aiming to only bring the previous year's income into LOS - so I'm assuming that that keeps me out of any Thai tax implications...........

As a rider to the above, I currently have some cash ISA's paying 5% net (Bradford & Bingley again) and a couple of PEP's. Am I right in thinking that - technically - I shouldn't continue to hold these if I become non-UK resident for tax purposes? I've picked up the impression elsewhere that this tends to pass un-noticed......... but maybe I'm falling prey to wishful thinking?

Thanks in advance for any helpful comments/tips.

Edited May 6, 2006 by Steve2UK

[briley]

AFAIK you can keep existing ISA's but you can't open any new ones. Believe the rules for POP's were brought into line last year.

I have always found offshore rates to be at least 20% lower than a good UK interest rate, that, linked with your normal tax free allowance and the 10% band, made offshore savings accounts a poor option for me - but it does depend upon your top tax rate.

[naka]

Normally, moving overseas on a permanent basis would allow

you to claim non residency in the UK for tax purposes. ( Form R105 )

However, if you continue to own a house in the UK then this

will complicate matters for you, and you may not be granted tax free interest.

Q & A, moving overseas

Naka.

[markuk]

Normally, moving overseas on a permanent basis would allow

you to claim non residency in the UK for tax purposes. ( Form R105 )

However, if you continue to own a house in the UK then this

will complicate matters for you, and you may not be granted tax free interest.

Q & A, moving overseas

Naka.

I use a internet only high interest account from First Direct - and u dont pay tax on UK savings if you are non-resident.

Sure there are better ways to make money but its safe and there if needed!

[GuestHouse]

Off shore accounts, Jersey IoM are now charging 5% tax added to which the interest rates are lower to start with.

Keep your ISAs and submit an application for non residence. You will not become non resident until you have spent ONE FULL TAX YEAR out of the country.

That is April 5th ~ April 4th, so you've missed it this year. If you leave the UK next month, you will start the run of your full tax year on April 5th 2007 and become indendent of the UK Tax man on April 4th 2008.

But it's not all bad news. You can still claim your tax allowance on your interest income, and you can still put more money in ISAs all through this year.

Edited May 7, 2006 by GuestHouse

[Guest endure]

How are you going to get your visa extension? By showing 800,000bt? If so, why don't you use that 800,000bt to live on during the year and you'll then only need to make infrequent ATM withdrawals. Nationwide International are paying 4.7% on an account with a max of 4 withdrawals a year.

http://www.nationwideinternational.com/int...es/sterling.htm

[Steve2UK]

I really appreciate the points and tips offered so far - thanks all.

Briley - your comment bears out what I've been finding i.e. that for the standard rate taxpayer (that's me), there's generally not a lot in it in terms of what you actually receive in interest from offshore accounts versus onshore after benefiting from the personal allowance and 10% band.

Naka - thanks for the Inland Revenue Q & A link. I should have spotted it before and scanning through it has cleared up a lot of my confusion.

Markuk - I'm with you on wanting to maintain security of and access to the finds deposited. I'm not a widow or an orphan, but I value sleeping easy and I'm not tempted by some of the riskier options.

Guesthouse - I hadn't spotted the 5% Jersey/IoM tax element (in spite of reading through terms & conditions of quite a few providers). If that's the case, they look even less attractive versus a better rate onshore. Good to know about keeping my existing ISA's; while I've already picked up another cash ISA just after April 6th this year (2006-7), maybe I can still pick up another for 2007-8 before my fully-fledged UK tax independence and top up with a maxi? I'll look into it - 5% net is looking good.

Endure - at the moment I'm undecided between entering with a year's non-imm B (and face the visa runs from Chiang Mai every 90 days) - because I may want to start a consultancy-type company and generate a work permit for myself - or entering with an "O-A". Being over 50, the "O-A" is not a problem but it's cumbersome to convert to "B" in Thailand later - whereas Hull will give me a "B" for the asking if I do it in the UK before leaving. The Nationwide option is appealing because it'd connect directly to my means of drawing on funds via ATM with their card. Downside is that the 4.7% (actually 0.20% above BofE base rate) is only for the first year - it drops to 0.25% below base rate after that. Something else that I'm keeping in mind is that I'll inevitably have a bunch of personal start-up costs during my first year as I buy stuff (car and other gear for the house etc) which won't be the case in following years (just our "usual" farang living costs ) - so I'm almost certain to be accessing my funds more often at the beginning.

Looking around the various accounts, there's the inevitable swings and roundabouts trade-off of return versus ready access with all the accounts. Ignoring the jokers who want to cane you up to 90 days loss of interest on your entire balance if you make a withdrawal without prescribed notice or more often than you're allowed for free, there seem to be some useful ones around - I like the Derbyshire 10-day notice account (currently 4.95% and you only lose 10 days interest on the withdrawn amount if it's less than 10 days notice) and a couple of PortmanCI accounts (up to 5%).

Needless to say, I'm trying to square a circle and - like everyone else - get the best balance of maximum actual return with the least access restriction. So far, a] there doesn't seem to be much in it between UK onshore/offshore in my case - and b] no-one has come up with any higher net return (but still safe and accessible) left-of-field options like a sterling deposit account in Singapore or Hong Kong, say.

[Guest endure]

Couple of points.

If you keep your money in an onshore savings account it doesn't form part of your income for tax purposes and is taxed at a straight 20%.

I think you'll find that the tax on Jersey/IOM accounts is as a result of a European directive and is set to rise over the next few years. It's there to 'harmonise' taxation on savings accounts for citizens throughout the EU. If you are non-resident for taxation purposes it doesn't apply to you and you get your interest fully tax free.

[Mobi]

A few points.

I think you will find that GuestHouse is incorrect in saying you must be out for a full tax year to be non resident for tax. I checked this out very thoroughly with tax advisers and the tax office some years back. The rule, as I undertsand it, is that you must be out of the UK for 9 months in each tax year - i.e you cannot spend more than 90 days in the UK. This may be important for you, as you are coming out shortly, and you may well qualify for non resdident status in this current tax year. Don't take my word for it - call the inland revenue help line - they are very helpful and you can do it anonymously.

Try Northern Rock Guernsey, and Abbey International based in Jersey. they both operate internet/phone accounts for expats, pay interest gross, and depending on your deposit level you can get over 4%. Check them out on the web.

The retentiion tax on interest does not apply if you are resident outside of the EU.

Sort out all your investment vehicles before leaving the Uk. Its difficult to open new ones, once you're out of the UK and you don't have proofs of residence etc. Banks are very sticky these days.

Maintain at least one UK based credit card - Visa ideally.

Maintain a UK address - parents, brother sister, friend or whoever - someone reliable. It won't affect your tax status and will come in handy for all kinds of things.

Good luck

[briley]

Mobi you make an interesting point.

You are non-resident if you are out of the UK for one full tax year but during the year you can visit the UK for 91 days - currently day of arrival and day of departure do not count but this is a concession and not the law.

I have always seen it taken that the 91 days of visit cannot be before you leave, ie you must leave before the 5th April then you can have your visit of 91 days - but I do not know how the days before you leave are counted.

However I'm not sure it matters if the OP is perminantly leaving the UK. Provided he stays out of the UK for one clear tax year then he is non-resident from the date of departure.

ie you leave the UK 10 June 2006 - you will have proved you are non-resident as of 6th April 2008 - but you have all the benefits of non-resident from the 10 june 2006.

If you leave the UK for work with a contract that takes you over one tax year then the Inland Revenue will treat you as non-resident as soon as you leave, but claw back any tax due if you return to the UK too early!

Just to clarify the time you can be in the UK: You can visit for up to 183 days in any one tax year with an average of 91 days per year over the past 4 years before you lose your non-resident status.

[Mobi]

Mobi you make an interesting point.

You are non-resident if you are out of the UK for one full tax year but during the year you can visit the UK for 91 days - currently day of arrival and day of departure do not count but this is a concession and not the law.

I have always seen it taken that the 91 days of visit cannot be before you leave, ie you must leave before the 5th April then you can have your visit of 91 days - but I do not know how the days before you leave are counted.

However I'm not sure it matters if the OP is perminantly leaving the UK. Provided he stays out of the UK for one clear tax year then he is non-resident from the date of departure.

ie you leave the UK 10 June 2006 - you will have proved you are non-resident as of 6th April 2008 - but you have all the benefits of non-resident from the 10 june 2006.

If you leave the UK for work with a contract that takes you over one tax year then the Inland Revenue will treat you as non-resident as soon as you leave, but claw back any tax due if you return to the UK too early!

Just to clarify the time you can be in the UK: You can visit for up to 183 days in any one tax year with an average of 91 days per year over the past 4 years before you lose your non-resident status.

I believe that what you say is correct. I should have mentioned that any Uk based earnings up to the date you leave the Uk is subject to Uk tax, but of course you get a full year's tax allowances against it.

I'm pretty sure I'm right - used to work with a multi national where this topic came up all the time with guys moving overseas to work. But the best thing is to check it out with the tax office.

[GuestHouse]

I think you will find that GuestHouse is incorrect in saying you must be out for a full tax year to be non resident for tax.

I assure you I am correct in what I have said. I took tax advice in July 2005, when I moved to Italy and have just this month started my clock for the purposes of measuring my tax residence. I shall become tax free from the UK in April 2007. This is very recent advice and I have just written to the tax office to confirm I am still out of the country at the start of this tax year.

The allowance to be in the country not more than 90 days still stands, but you can't claim those as the first 90 days of the tax year. You need to be out of the UK on April 5th.. then the clock starts.

It is not just as simple as being out of the country, you also need to break a number of financial ties too.

My advice is speak to a tax advisor now.

The rules regarding this full tax year issue changed less than two years ago.

[Steve2UK]

Endure - thanks for the follow-up. What you (and Mobi) say about the offshore account EU retention tax now sounds familiar - I remember seeing a reference to it before and dismissing it because I wouldn't be EU-resident.

Mobi - excellent points. I'm going to look into the tax year implications, given the timing of my departure from the UK. I'd certainly planned on getting my investments in place for the long term before I leave - precisely because of the hassle of doing it from LOS; similarly, I'm staying clear of accounts that offer an introductory "get you in" bonus rate - that just means that I'd be looking to change it (from LOS) 6 months down the line. Likewise the point about the UK address and credit cards; BTW, any particular reason why Visa is preferable?; I've tended to maintain both Mastercard and Visa - with a deliberately low limit on the Visa for using it online. I also plan to try and get a Visa credit/debit card from a Thai bank account (been following that topic as well) so as to avoid the exchange fees on a UK version. Thanks also for the Northern Rock and Abbey suggestions - I'll compare those with others I'm checking out from the Moneyfacts and other listing sites.

Briley - also good points. Barring accidents, I'm not planning any long visits back to the UK - proably only once or twice a year (if that) for a flying visit to sort out anything to do with the rental property etc. What you say also bears out the impression I got while scanning through the Inland Revenue website; basically, it seems like you claim the non-resident status pretty much from the word go (so you can get interest and rent paid gross) and then have to account for it when you do the relevant tax return - at the same time demonstrating that you've met the absence-from-UK requirements.

[Guest endure]

I also plan to try and get a Visa credit/debit card from a Thai bank account (been following that topic as well) so as to avoid the exchange fees on a UK version.

Once again Nationwide is your friend. There are no overseas commission charges on purchases made with Nationwide credit cards nor do they charge you overseas commission for using it to obtain cash although you'll still pay the 2% charge that you would if you used it to get cash in the UK. It can be quite useful at times. I found myself at an ATM in Bangkok which wouldn't give me cash on my ATM card because it was reporting 'communications problems'. Presumably it couldn't get to my Flexaccount to see if I'd got enough cash. Using a Nationwide credit card in the same machine got the wedge straightaway.

[Guest endure]

It's also quite easy to get a debit card from Bangkok Bank - it's called the Be1st and can be used as a debit card in Thailand and as an ATM card worldwide. The BKK Bank at Kad Suan Kaew is used to dealing with farangs and they're really helpful.

[Steve2UK]

It's also quite easy to get a debit card from Bangkok Bank - it's called the Be1st and can be used as a debit card in Thailand and as an ATM card worldwide. The BKK Bank at Kad Suan Kaew is used to dealing with farangs and they're really helpful.

Thanks a lot, Endure. I'd been thinking about SCB generally, but thought I might have a problem after the talk of new rules being introduced recently (as discussed elsewhere) as in "no work permit? cannot"..........

I've got the standard red Nationwide FlexAccount cash card and already had it on my list to check out the benefits of the blue version (do you know the difference?) and now (after what you've said) I'll also get myself a Nationwide credit card.

[Guest endure]

I opened a savings account at Kad Suan Kaew in January (I'm making preparations too ). I took in 5000bt, my passport and a mate's condo address. The account was opened straightaway but I had to go back a week later to pick the BE1st card up.

I've never even seen a red Flexaccount card Is yours a cash card only? I have the blue one and it's both an ATM (cash) card and also a debit card.

[taxexile]

Maintain a UK address - parents, brother sister, friend or whoever - someone reliable. It won't affect your tax status and will come in handy for all kinds of things.

to be free of the effects of the euro tax directive , which will be punishingly expensive in the future , you must have a residential address out of the eeu area.

you can , however , maintain a mailing address in the uk , jersey/iom banks allow you to maintain two addresses.

[Mobi]

I think you will find that GuestHouse is incorrect in saying you must be out for a full tax year to be non resident for tax.

I assure you I am correct in what I have said. I took tax advice in July 2005, when I moved to Italy and have just this month started my clock for the purposes of measuring my tax residence. I shall become tax free from the UK in April 2007. This is very recent advice and I have just written to the tax office to confirm I am still out of the country at the start of this tax year.

The allowance to be in the country not more than 90 days still stands, but you can't claim those as the first 90 days of the tax year. You need to be out of the UK on April 5th.. then the clock starts.

It is not just as simple as being out of the country, you also need to break a number of financial ties too.

My advice is speak to a tax advisor now.

The rules regarding this full tax year issue changed less than two years ago.

Guesthouse, I am sure you are correct. Clearly the rules have been modified. The year I last came out, I had already blown the 90 day rule in that year so it didn't apply.

Steve, its still worth a call to be sure tho'.

Why Visa? No reason other than its a bit more ubiquitous than Master Card. Its always handy as afall back/ emergencies - everyone here - and the world - who takes ccards, will take visa. Matyer card's probabably fine tho'.

Taxexile, does this new directive mean I must maintain an address for my bank outside the EU as well as an optional one inside the EU.? Not a big deal, but I still have one bank (with a current a/c) that is has an address solely in the UK. (interest not relevant).

[Steve2UK]

I opened a savings account at Kad Suan Kaew in January (I'm making preparations too ). I took in 5000bt, my passport and a mate's condo address. The account was opened straightaway but I had to go back a week later to pick the BE1st card up.

I've never even seen a red Flexaccount card Is yours a cash card only? I have the blue one and it's both an ATM (cash) card and also a debit card.

Sad to say, opening a Thai account is (the?) one thing that I neglected to do when I was back in CM last December - would have been smart as I will need about THB1,000,000 when I next arrive (buy a car, TV etc)......... mai pen rai . I'll be on to Nationwide today to sort out the card - it is red and just carries the Cirrus and Link logo's and is labeled "Cash Card" - so I think it's only for ATM's. I did hear before that one difference was that the blue version let you check your balance at an ATM?

[Steve2UK]

I think you will find that GuestHouse is incorrect in saying you must be out for a full tax year to be non resident for tax.

I assure you I am correct in what I have said. I took tax advice in July 2005, when I moved to Italy and have just this month started my clock for the purposes of measuring my tax residence. I shall become tax free from the UK in April 2007. This is very recent advice and I have just written to the tax office to confirm I am still out of the country at the start of this tax year.

The allowance to be in the country not more than 90 days still stands, but you can't claim those as the first 90 days of the tax year. You need to be out of the UK on April 5th.. then the clock starts.

It is not just as simple as being out of the country, you also need to break a number of financial ties too.

My advice is speak to a tax advisor now.

The rules regarding this full tax year issue changed less than two years ago.

Good advice. For various reasons, I'll be keeping my long-standing one-man-band UK limited company ticking over after I move to LOS and I plan to have that company's accountant continue to look after its returns as well as handle my personal stuff. He's not really expat-savvy, but - armed with the pointers from this thread - I should be able to get the optimum arrangements up and running. Again, thanks to all who have offered their thoughts . If I turn up anything new, I'll post the info here.

[Guest endure]

Sad to say, opening a Thai account is (the?) one thing that I neglected to do when I was back in CM last December - would have been smart as I will need about THB1,000,000 when I next arrive (buy a car, TV etc)......... mai pen rai . I'll be on to Nationwide today to sort out the card - it is red and just carries the Cirrus and Link logo's and is labeled "Cash Card" - so I think it's only for ATM's. I did hear before that one difference was that the blue version let you check your balance at an ATM?

The blue version is a full debit card which can be used both as an ATM card and to buy stuff in shops.

[Steve2UK]

Sad to say, opening a Thai account is (the?) one thing that I neglected to do when I was back in CM last December - would have been smart as I will need about THB1,000,000 when I next arrive (buy a car, TV etc)......... mai pen rai . I'll be on to Nationwide today to sort out the card - it is red and just carries the Cirrus and Link logo's and is labeled "Cash Card" - so I think it's only for ATM's. I did hear before that one difference was that the blue version let you check your balance at an ATM?

The blue version is a full debit card which can be used both as an ATM card and to buy stuff in shops.

And presumably also usable in the bank itself to draw/access large amounts? In that case, it could solve my issue of opening my Thai account and moving close to THB1,000,000 into it in one fell swoop? Obviously, I can also put down 5 crisp 1,000 baht notes if that's what they prefer..........

(apologies to others for wandering a bit from my original topic)

[Guest endure]

Sad to say, opening a Thai account is (the?) one thing that I neglected to do when I was back in CM last December - would have been smart as I will need about THB1,000,000 when I next arrive (buy a car, TV etc)......... mai pen rai . I'll be on to Nationwide today to sort out the card - it is red and just carries the Cirrus and Link logo's and is labeled "Cash Card" - so I think it's only for ATM's. I did hear before that one difference was that the blue version let you check your balance at an ATM?

The blue version is a full debit card which can be used both as an ATM card and to buy stuff in shops.

And presumably also usable in the bank itself to draw/access large amounts? In that case, it could solve my issue of opening my Thai account and moving close to THB1,000,000 into it in one fell swoop? Obviously, I can also put down 5 crisp 1,000 baht notes if that's what they prefer..........

That's somehting I'm not sure about. I suspect it would probably vary from bank to bank

[briley]

Yes, at least with Bangkok Bank on Suthep Road Chiang Mai you show your Nationwide card (the red one can't be used as a debit card in the shops, it doesn't say DEBIT CARD on it!) and they will transfer money direct into your Bangkok Bank account.

I have done it for over 70,000 baht and know personally someone who did it for over 600,000 baht in one go.

IF you ask and are lucky they will mark it in your book as a TTF or FCH (telegraphic transfer or foreign cheque) so that proves it came from overseas. Can be helpful with immigration. Money for buying a condo MUST come from overseas.