Saving the proceeds of the UK house sale

[tyhapus]

Well the good news is we have sold our house in the UK (at a huge price reduction grrr) but we're not moving any cash over until the exchange rate improves.


Anyone got ideas about where to bank the loot while we wait - and get the best interest rates?

Do we have to pay tax, being NZ residents now ..????

Cheers all

[IanRich]

Yep, we are in the same situation of having a pot of cash from the sale of our house, and also the same question of what are the tax implications of transferring cash?

I suppose majority of the NZ banks could advise, but I am sure there is a bias for them to get your cash in their bank, has anyone have a recommendation of which bank to use?

Cheers

Ian

[James 1077]

Bank-wise if you have an account in the UK but are resident in NZ then you won't pay tax on the interest in NZ (provided you meet the transitional resident criteria).

You may however have to pay tax on the interest in the UK as it should be withheld at source and taxed at a lower rate for non-residents.

Therefore one thing to do is to move the money into an offshore environment to avoid having to pay tax on it (ie Jersey, Isle of Man, Singapore, Hong Kong). Most banks will have offshore arms - although the problem with these is that they may not be covered by the various banking guarantees (or could be covered but it will take a long time to get your money).

As with everything where to put it depends on risk and return. If it is lots of money then I would advise talking to an independent finanical advisor!

[Wooly_Cow]

James has got it pretty much spot on. You shouldn't pay UK tax, and in NZ there is an exemption for 4 years for new migrants for tax on all overseas income (I think).

HSBC offer an overseas service. Jersey based but run out of IoM! Given their size and recent stability / liquidity measures they are one of the safer banks (I was about 30 minutes away from putting all our cash into an Icelandic bank ....but chose HSBC at the last moment....phew!)

Regarding the exchnage rates the Kiwi dollar (or Pacific Peso as it's known) fluctutates wildey around a median of about 2.68 to the pound. You can arrange future exchanges at a set rate at compnaies like HiFX. This will guarentee your exchange rate if it ever reaches that level (you have to give them 10% up front).

Interest rates here are around 3% before tax.

Hope this helps

[JandM]

Thanks for the info.

And/But...

There has been a lot of talk in the UK and Europe in the wake of the financial problems about closing loopholes and making sure no tax havens are available, so be careful you don't get caught out in any sneaky legislation - I'd ask a consultant about your specific case.

[James 1077]

Thanks for the info.

And/But...

There has been a lot of talk in the UK and Europe in the wake of the financial problems about closing loopholes and making sure no tax havens are available, so be careful you don't get caught out in any sneaky legislation - I'd ask a consultant about your specific case.

Tax haven-wise this is only going to apply to EU residents. Basically tax havens will have to inform the relevant countries of deposits sitting in offshore bank accounts or be subject to sanctions.

There is nothing wrong or illegal with offshore bank accounts provided that you are declaring the interest earned for tax in the country in which you live. The problem is that many people who bank offshore do not declare the interest earned! I have a number of friends who have offshore accounts but declare the interest in the UK - the reason for the accounts is in case they need to make a quick getaway from the UK! In NZ's case you don't have to declare it for 4 years if you are a transitional resident so can earn the money tax free.

Incidentally one of the Irish Banks has an NZ$ account in the Isle of Man which earns NZ$ rates of interest tax free.

[Wooly_Cow]

Tax haven-wise this is only going to apply to EU residents. Basically tax havens will have to inform the relevant countries of deposits sitting in offshore bank accounts or be subject to sanctions.

There is nothing wrong or illegal with offshore bank accounts provided that you are declaring the interest earned for tax in the country in which you live. The problem is that many people who bank offshore do not declare the interest earned! I have a number of friends who have offshore accounts but declare the interest in the UK - the reason for the accounts is in case they need to make a quick getaway from the UK! In NZ's case you don't have to declare it for 4 years if you are a transitional resident so can earn the money tax free.

Incidentally one of the Irish Banks has an NZ$ account in the Isle of Man which earns NZ$ rates of interest tax free.

Spot on again - you should do this for a living

[dharder]

We have the house sale proceeds in an off shore account and declare the interest (not a whole lot these days...) here.

There is an exemption for the first four years, but if you claim that, you cannot claim working family tax credit (or something similar, not exactly sure what it is called). So it may be worth calculating interest agains potential tax credit, and work out what was better in the personal situation.

It really depends on individual circumstances.

Daniela

[chocolate cake]

Well the good news is we have sold our house in the UK (at a huge price reduction grrr) but we're not moving any cash over until the exchange rate improves.


Anyone got ideas about where to bank the loot while we wait - and get the best interest rates?

Do we have to pay tax, being NZ residents now ..????

Cheers all

Finally in a similar position, completion today also taken a nasty price reduction too.

As others have been stated you have 4 years grace after moving to NZ on investment income. I've currently an account with Barclays in the Isle of Man which avoids UK tax.

Whatever you do don't bring across to NZ into a GBP account with NZ bank, they'll pay 0% rate, and actually charge you for holding it too.

Now just waiting for that GBP rate to improve, can't soon enough.

[adacakes]

We sold our house 4 weeks ago and walked away with £40,000.
We have just bought £30,000 premium bonds and kept the other in Barclays
more for more account.
We have been told by various people "ooh you shouldn't get premium bonds bad return etc" any other ideas please???