[Dazza]

Hi All

Can you please help? We really don't know what to do regarding money?

We are going to make a large sum of money on our property and want to know, the true benefits of opening an off shore account?

Can the UK government charge you in any way for keeping a large sum of money in a Bank, made on your property?

Are we best transferring all our money, at the end of Feb or holding back?I appreciate this will be advice?

All your help is greatly appreciated? :raebanana

Cheers

Wendy & Daz

[Bubbles]

Hi folks,
I have no information for you other than you really should try and get hold of Diny ( pm or email ). Her and PB setup an offshore account and did discuss it on here but I can't find the thread, sorry. :(

John

[Avalon]

I have yet to understand the pros and cons of this too, so I look forward to you getting an answer.

Thanks for asking the question

[Wannaway]

Interest earned on money held on deposit is taxable in the UK whilst you are UK resident. You are taxed on your worldwide income whilst UK resident, so it makes no difference from a tax point of view where the money is held. The same is true when you have NZ residency, you will be liable for NZ income tax on interest earned on deposits on a worldwide basis from the date you become NZ resident. Because of this, and unless you are planning to spend some time (eg more than say 3 months) in between UK/NZ, offshore accounts do not afford any UK/NZ tax advantages. The only advantage may be that you can get a better interest rate on your deposit in an offshore location (and, in reality, this is primarily going to be the Channel Islands). We sold our house in Sept 04 and have kept our money in sterling in the UK ever since, there did not seem any real advantage in transferring to an offshore account in our situation. We haven't changed our money up for two reasons (i) the exchange rate has been rubbish for 18 months and (ii) we have not yet found a house we would like to buy. We also kept our money with HSBC UK because this gave us a lot of flexibility in terms of our NZ bank accounts and access to UK credit cards etc, but this was very much a personal decision rather than a "hard headed" financial one.

If you leave the UK for NZ and leave your money on deposit in the UK (as we have done) you need to fill in a form for the UK bank (can't remember the number, sorry) declaring that you will no longer be a UK resident. This means the UK bank will credit interest to your account gross (ie no UK tax deducted). You would still be liable for income tax on the interest in the NZ though, from the date you became NZ resident.

You might not need to move money offshore, you might just need to shop around for the right "product". If you don't need access to funds for a period of time, you might be able to achieve better interest rates on term deposits and money markets. If you are with one of the big 4 banks, I would suggest you speak with one of their financial advisors. You could also try the Money Extra website, which compares savings rates in the UK. If you type something like "money extra" into your search engine you should be able to find it. It is a UK website.

As to whether you should change up your money now depends on what your plans are. If you want to buy soon after landing in NZ then you need to watch the rates now to see if you can get a good enough rate (do you have in mind the amount of NZ$ you would like to achieve?). Alternatively you could sit tight to see if the much discussed, long awaited fall in the Kiwi $ materialises this year, although the NZ$ has been tipped for a fall for some time with still no obvious sign of weakness. You could always speak to the good people at HIFX for some general advice on exchange, they shouldn't charge you anything for general discussion. Their website is http://www.hifx.co.uk.

[Bailers]

The inland revenue form to receive interest on a UK account without tax is r105

http://www.hmrc.gov.uk/pdfs/r105.pdf

We've just opened a First Direct account at 5% interest which we will use until the $ drops (hopefully).

Cheers

Mark

[Avalon]

Wannaway -

Thank you for putting that in plain english - I actually understood it all!

[Dazza]

Superb wannaway thanks for the great advice/info, mod/admin should make this a sticky post.

Cheers bailers for the form saved some searching.

Dazza.