banks and foreign exchange

[cozwemust]

can anyone help?

i am emigrating to australia in february as a permanent resident and have savings in a high interest savings account and a cash mini isa here in the uk. with the exchange rate being so poor at the moment is it ok for me to leave them in there for as long as i want before transferring them to oz through currencies direct or hifx? will i be taxed a lot or not? anyone got ant recommendations when to transfer/which company to use??

any advice would be greatly appreciated thanks

[Stravinsky]

Originally Posted by cozwemust

can anyone help?

i am emigrating to australia in february as a permanent resident and have savings in a high interest savings account and a cash mini isa here in the uk. with the exchange rate being so poor at the moment is it ok for me to leave them in there for as long as i want before transferring them to oz through currencies direct or hifx? will i be taxed a lot or not? anyone got ant recommendations when to transfer/which company to use??

any advice would be greatly appreciated thanks

You need to apply for tax free status when you leave the UK on your savings account (contact the inland revenue or your building society for the form), and you also need to notify the ISA company. You will then not be taxed in the UK and the tax burden will transfer to Auz. You won't be able to contribute any more to your cash ISA though, or open another one in the future.

[kaz101]

Stravinsky is spot on. I had forgotten the forms we had to fill in to say we had left and stop taxing us in the UK

I get quotes from the major companies and then see which one is the best quote. They will negotiate on rates and charges if they know you are doing this with their competitors and depending on the amount of money you are transferring.

Regards,
Karen

[cmallon]

Originally Posted by cozwemust

can anyone help?

i am emigrating to australia in february as a permanent resident and have savings in a high interest savings account and a cash mini isa here in the uk. with the exchange rate being so poor at the moment is it ok for me to leave them in there for as long as i want before transferring them to oz through currencies direct or hifx? will i be taxed a lot or not? anyone got ant recommendations when to transfer/which company to use??

any advice would be greatly appreciated thanks

We are using HiFX and they have been really good so far. We are takign advantage of the Quantas offer that they have to get double luggage allowance and we managed to book ourselves a decent rate a few months ago for a February transfer.

[cozwemust]

dear karen and all,
sorry to ask this again. do i really have to fill out tax forms so i dont have to pay tax on my uk internet savings account and cash mini isa which i am leaving here in the uk? coz i dont pay much tax with the isa anyway do i? i dont understand the tax thing at all and how it gets transferred to oz if i fill out the forms? is it not just easier to forget the forms? any advice please as i leave in 2 wks would be greatly appreciated.
thanks

[kaz101]

Originally Posted by cozwemust

dear karen and all,
sorry to ask this again. do i really have to fill out tax forms so i dont have to pay tax on my uk internet savings account and cash mini isa which i am leaving here in the uk? coz i dont pay much tax with the isa anyway do i? i dont understand the tax thing at all and how it gets transferred to oz if i fill out the forms? is it not just easier to forget the forms? any advice please as i leave in 2 wks would be greatly appreciated.
thanks

The forms go part of the way to show that you are leaving the country. It's obviously up to you what you do but I think that is the norm. If you are not sure why not ring up the tax office and get them to help - and yes they can be helpful at times!

We filled in forms to say that we didn't want to pay tax on bank accounts and on rental income. HMRC (Her Majesty's Revenue and Customs) then sent back an approval form saying you don't have to pay tax. Since we will still be earning in the UK (through rental income) we will still be filling in UK tax returns but as I understand it, not paying tax in the UK but in Australia. The amounts just get filled in on our Australian tax returns instead. I have yet to go through that part of the process since we haven't been resident for a tax year yet.

The forms are easy to fill in.

Unfortunately just because we don't understand tax (and who does?) doesn't mean we can ignore it.

Regards,
Karen

[cozwemust]

thanks very much. x

[Bevdeforges]

Filling out the tax forms is well worth the effort. Most countries tax their residents based on their world-wide income, so once you establish your "tax residence" in Australia, you'll be expected to report all income (including that on your UK bank accounts) to the tax authorities and pay tax on it.

There are a few types of income that continue to be taxed by the country where they come from (as Kaz has mentioned), but these are usually handled by treaties between the countries. If all you'll have in the UK is some bank interest, by all means, fill out the forms and save yourself the hassle of having to figure out the treaties once you get to Oz.
Cheers,
Bev

[cozwemust]

thanks. i asked the internet savings account if i could fill in and send them the r105 form so i dont have to pay tax on it but they said i gotta be a uk resident to have the account, then they said as long as its still under this address in the uk its fine (my parents), but when i have a new address in oz i will have to write and tell them then obviously the account will have to be closed. dont know how long it will be before i have a new address in oz as i am travelling for a while. is it ok if i tell the tax office this in a letter when i send in the r85 form stating that im leaving the uk? then the tax office will see me as non resident but the bank will see me as resident..?? is that ok and for how long? am i breaking the law? does anyone know? sorry to go on but i leave in 2 wks and my heads done in! thanks

[kaz101]

Originally Posted by cozwemust

thanks. i asked the internet savings account if i could fill in and send them the r105 form so i dont have to pay tax on it but they said i gotta be a uk resident to have the account, then they said as long as its still under this address in the uk its fine (my parents), but when i have a new address in oz i will have to write and tell them then obviously the account will have to be closed. dont know how long it will be before i have a new address in oz as i am travelling for a while. is it ok if i tell the tax office this in a letter when i send in the r85 form stating that im leaving the uk? then the tax office will see me as non resident but the bank will see me as resident..?? is that ok and for how long? am i breaking the law? does anyone know? sorry to go on but i leave in 2 wks and my heads done in! thanks

Hi Cozwemust,

We also have an internet bank account in the UK. They know we are in Australia since I have told them and we don't pay tax on the account. However their bank system will not accept foreign addresses so I had to supply my parents address. The bank knows this and accepts it. We rarely get post from them since all the bank statements are online.

The UK tax office know that we have left the UK and I have still filled in all the relevant forms. They also know that we still have a bank account in the UK. We are not hiding anything at all from them.

We have been doing this for just over 6 months and no-one seems to have any problems.

If the bank will really close down your account once they know that you have left the country and you want to feel more secure I would suggest changing your bank account to another bank.

Regards,
Karen