[stevied20]

OK, need a bit of advice, and this is the best place by far.

We have our house money sitting in the Halifax at 6%.
We leave for Cch, NZ in 10 weeks
We will be renting for 12 months, speculating that the housing market will cool a little more by then.
Therefore, we need to decide on where to put our money, we do NOT want to exchange yet, so we need to place it in a sterling account somewhere until it is needed.
Ultimately we are hoping for the following:

1) Lower interest rates in 12 months
2) Cheaper houses
3) A better exchange rate than now.

All this is a risk, but so is moving the other side of the world, to a place you have never visited before....lol.....eeeeeek!

Right, to the point, our questions are:

1) Can anybody recommend an offshore account where we can keep our money, in sterling, while paying as little tax as possible and with the best interest rate?
2) Can you keep it in the UK (Halifax), or are their implications to this?

Thanks

Steve & Julie

[James 1077]

Shouldn't be UK tax implications if you keep it in the Halifax provided you fill in a form (can't remember the number, sorry) that states you are non-tax resident in the UK. This will mean the Halifax won't deduct tax when they pay your interest and you won't need to declare any income in a UK tax return.

Best bet is to go into your local branch and ask them as they'll have all the forms there.

If you are charged interest while the form is being processed then you'll be able to get it back by completing a UK tax return at the end of the year. As you'll be leaving in 10 weeks time you should be doing this anyway as you should be able to get back all / most of the tax that you have paid on your salary so far this year!

[YouMeAndThree]

I shall be watching this thread with interest - but I have another couple question to add in for myself (sorry). We have set up our NZ$ account and a NZ£ account - would it be a good idea to transfer our savings to the sterling a/c for a better rate? Or leave it in the UK? What would the NZ tax implications be?

[James 1077]

If you transfer the money to NZ then you'll have to pay tax in NZ on any interest earned. But if you keep it outside of NZ then, provided you meet the rules for electing for overseas income to be tax-free, then you won't pay tax on any interest earned for 4 years.

The rules are here (http://www.ird.govt.nz/yoursituation-nonres/move-nz/temp-tax-empt-foreign-inc.html)

You should, however, note that you can't get working for families tax credits if you chose to do this.

The other thing that you need to think of is the interaction between interest rates and foreign exchange. Holding the cash as GBP rather than NZD will mean that you earn less interest on the cash but you may win in the long term if the exchange rate moves back to its normal position (you may lose though if it worsens).

Holding the cash in NZD means that you earn more interest, know eactly how much NZD you have in cash and are protected from adverse changes to the GBP / NZD exchange rate (but you won't win if the rate moves favourably).

Basically the choice is yours as to how much you want to gamble on the exchange rate compared to how much you lose on the interest rate. You could for example decide to change some but not all!

Regardless of the decision it is generally better to keep the money outside of NZ unless you are qualify for Working Families Tax Credits in which case you'll need to do some calculations to work out which way you are better off!