# keeping a uk savings account



## Lucie123 (Dec 7, 2011)

Been looking through the net but cant really get an answer as to how this works. i have an ISA and i talked to the bank and they said you can keep an ISA open if you are out of the uk for more than 6 months but cant add to it so its best to stick it in a fixed rate account for a couple of years if you dont need access to it i guess then if u settle in spain close it and take the money out

but whats the situation with a normal savings accounts that u can access online and add/take money out when you went? I see most accounts say u have to be a resident in the uk to open.are there any accounts that you can open as a non resident?


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## Stravinsky (Aug 12, 2007)

Lucie123 said:


> Been looking through the net but cant really get an answer as to how this works. i have an ISA and i talked to the bank and they said you can keep an ISA open if you are out of the uk for more than 6 months but cant add to it so its best to stick it in a fixed rate account for a couple of years if you dont need access to it i guess then if u settle in spain close it and take the money out
> 
> but whats the situation with a normal savings accounts that u can access online and add/take money out when you went? I see most accounts say u have to be a resident in the uk to open.are there any accounts that you can open as a non resident?


I kept all my accounts and credit cards going when I left. I kept an ISA running for about 5 years.

You _can_ open accounts with some banks in the UK when you reside elsewhere, and for instance HSBC seem quite happy to keep accounts open even when you are abroad.


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## Lucie123 (Dec 7, 2011)

Did u leave your ISA in a fixed account. do you know if what ive been told about that is correct interms of not being able to add etc?


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## Stravinsky (Aug 12, 2007)

Lucie123 said:


> Did u leave your ISA in a fixed account. do you know if what ive been told about that is correct interms of not being able to add etc?


I just left it in the account it had always been in .... and just never told them I had left. Eventually at the end of last year I cashed it in as it was making no interest.

Bear in mind that if you have a tax free ISA and you cash it in once you have moved to Spain, it is no longer tax free as the Spanish will count it as income if declared and levy tax on it


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## xicoalc (Apr 20, 2010)

I don't know about ISAS but normal bank or savings accounts you can usually leave open. When I left the UK I left accounts open with banks, both current accounts, savings and credit cards. They were happy. I gave them the Spanish address and they sent statements here. 

Just talk to your bank... anonymously at first.. and when they say "yes you can do it" then give your account number and tell them to go ahead!


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## Lucie123 (Dec 7, 2011)

Thanks didnt know about the tax what rate is it.. how come the spanish tax it as if you just transfer sterling from a uk account to a spanish one that doesnt get taxed does it? as its already been taxed over here as they presume it came from a wage.so if you close an ISA and just put the money into a uk account then transfer it to a spanish account how do they know where the money has come from.


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## stevesainty (Jan 7, 2011)

I telephoned HMRC a while ago and had a 20 minute conversation about tax issues when we move to Spain, they are rather friendly you know.

On the subject of ISA's you need to be tax resident in UK to take out any new ones. You can keep all the ISA's that you have for as long as you like as long as you keep them in the 'ISA wrapper' ie not withdraw the money. You keep on enjoying the tax free benefits even though you are not UK tax resident.

The trouble is though that the competition by the various banks is so fierce what normally happens is that they advertise a guaranteed interest rate for a fixed time only, say two years, and after that the interest rate drops to maybe a half of one percent. So although you can enjoy that interest tax free it is so little you might as well try for better elsewhere.

We get regular emails from one of the 'money savings experts' web sites in the UK. They advise you on the best deals around. At the moment we have an internet-only operating Santander savings account that pays 3.2% gross. You can pay in or take out as often as you like and just get the interest calculated daily on your balance (but only credited annually). You do have to be on your toes though because there are new packages coming out all the time.


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## Lucie123 (Dec 7, 2011)

Yeah thats the prob with ISA's re the intrest rates dropping after a year so i thought it would be the best bet to put it into a fixed rate for a couple of years and by the time the two years is up you have either settled in spain or you are back in uk and havnt lost the tax free status.

so does the santander account allow you to open it even though you are in spain or is it a spanish based account?


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## stevesainty (Jan 7, 2011)

We are still in UK at the moment so I do not know if you can open a new UK Santander account if you reside in Spain. I suppose if you had a UK residential address they would not know the difference.

When we changed from one Santander acount to one with a better rate we just telephoned their help desk and they did it all for us overnight including transferring the balance.

You do get better rates for fixed terms, I agree, but there are usually quite hefty penalties for early withdrawal although some allow you 1 free per year. It is a gamble though to take a fixed rate for more than one year though because if interest rates rise you dip out. I take the view that interest rates can only rise at the moment.


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## Lucie123 (Dec 7, 2011)

Yeah thats true but re the isa it would be pointless leaving it in a non fixed account once we are in spain as after a year it would be earning vertually nothing in intrest and i wouldnt be able to move it to another provider.


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## stevesainty (Jan 7, 2011)

Yes that is true for the ISA's and yes if you can afford to tie up your savings for at least one year at a time then fixed term savings are the way to go.

You still would need to get a decent fixed term rate to compete with 3.2% gross for the absolute flexibility of our current Santander account though IMHO. The best one year rate is 3.6% gross at the moment


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## Lucie123 (Dec 7, 2011)

Yeah ive put my isa in a two year fixed at 3.70 as we hope to move after that. and i have a normal internet savings for 3.26 until november


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## Alcalaina (Aug 6, 2010)

Lucie123 said:


> Thanks didnt know about the tax what rate is it.. how come the spanish tax it as if you just transfer sterling from a uk account to a spanish one that doesnt get taxed does it? as its already been taxed over here as they presume it came from a wage.so if you close an ISA and just put the money into a uk account then transfer it to a spanish account how do they know where the money has come from.


It's only the interest that gets taxed. I think it's about 20%.


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## Lucie123 (Dec 7, 2011)

Ok thanks. that abit confusing as my ISA has been built up over ten years. so they expect you to work out all the intrest you have made since then and declare that.


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## Stravinsky (Aug 12, 2007)

stevesainty said:


> I telephoned HMRC a while ago and had a 20 minute conversation about tax issues when we move to Spain, they are rather friendly you know.
> 
> On the subject of ISA's you need to be tax resident in UK to take out any new ones. You can keep all the ISA's that you have for as long as you like as long as you keep them in the 'ISA wrapper' ie not withdraw the money. You keep on enjoying the tax free benefits even though you are not UK tax resident.


When you cash in an ISA and you are a Spanish resident, it is liable to Spanish tax and you are supposed to declare it. The same as lump sum tax free pension payments. You get them in the UK, but they are subject to Spanish tax if you are a Spanish resident. So ... tax free if a UK resident .... taxable if a Spanish tax resident


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## Alcalaina (Aug 6, 2010)

Lucie123 said:


> Ok thanks. that abit confusing as my ISA has been built up over ten years. so they expect you to work out all the intrest you have made since then and declare that.


Only the interest earned while you were resident in Spain. You're supposed to declare it each year along with all your other income (May-June 2012 for income received in 2011).

What I can't quite work out is whether you still need to declare interest that was immediately reinvested with the capital sum - Strav, do you know?


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## Stravinsky (Aug 12, 2007)

Alcalaina said:


> Only the interest earned while you were resident in Spain. You're supposed to declare it each year along with all your other income (May-June 2012 for income received in 2011).
> 
> What I can't quite work out is whether you still need to declare interest that was immediately reinvested with the capital sum - Strav, do you know?


Not for sure, but I suspect it will be the interest paid that they would accept ... however to be honest (and I am not indicating that I am recommending this) to be honest they (Spanish tax) are unlikely ever to find out unless the ISA company actually tells HMRC / Hacienda. I suspect that there are thousands of expats who have taken tax free lump sums (pensions) in the Uk and never declared them in Spain.


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## stevesainty (Jan 7, 2011)

Stravinsky said:


> When you cash in an ISA and you are a Spanish resident, it is liable to Spanish tax and you are supposed to declare it. The same as lump sum tax free pension payments. You get them in the UK, but they are subject to Spanish tax if you are a Spanish resident. So ... tax free if a UK resident .... taxable if a Spanish tax resident


I have a 'Government Pension' and therefore will still have a tax allowance in UK, I wonder if that makes a difference to the declaration in Spain of the tax free earnings?


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## Stravinsky (Aug 12, 2007)

stevesainty said:


> I have a 'Government Pension' and therefore will still have a tax allowance in UK, I wonder if that makes a difference to the declaration in Spain of the tax free earnings?



Your Government 0pension is of no real Interest to the Spanish tax man, as all Government pensions are taxed in country of origin. However if you receive a government pension and a state pension then you can transfer the tax burden on the state pension to Spain and take advantage of two tax allowances.


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## stevesainty (Jan 7, 2011)

Sadly my state pension is still more than a decade away. We can however file a joint tax return in Spain so OH´s state pension will be tax free.


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## Stravinsky (Aug 12, 2007)

stevesainty said:


> Sadly my state pension is still more than a decade away. We can however file a joint tax return in Spain so OH´s state pension will be tax free.



Sadly? .... be happy you're that far away!  When you_ are _actually old enough to get it you might well be saying "sadly"


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## brocher (Mar 21, 2011)

Well, this thread has caused a flurry of activity here, as I thought all my daughters savings were well organised in ISA's.

I knew she couldn't add to them, but had no idea that meant you could not transfer exisiting ones when the rate drops. Luckily some will be fine but one we just transferred, will drop to zilch at the end of the year. 

So here's what I've found out from HMRC Savings Helpline - phone 0845 604 1701- very helpful if you have an hour to spare waiting in a queue and don't die of boredom waiting. You will then have to wait some more while they transfer you to someone who knows anout Non-resident matters. You can keep current ISA. You can't transfer current ISa's. You can make withdrawals (subject to the terms of the ISA).

Be careful if you are putting all your savings into one fixed rate ISA's because most of them now allow no withdrwals - bit of a problem if the balance can't be transferred into another ISA. Perhaps safer to split your money between several accounts.

I know my daughter had no problem keeping her current account, etc open in the UK.

I've been having a look on one of the comparison websites and there seem to be several decent online savings accounts available which you can open with a small deposit (from £1) and I think opening one of these while you are still a UK tax resident might be the way to go. It can just sit there until you need to transfer larger sums into it. HMRC advice is that you are still tax resident until you have been out of the country for a full tax year. They also told me that you can fill in Form R105 once you become non tax resident to have your interest paid gross, if you have no other UK income taking you above the UK tax threshold. I presume you should then be declaring this interest and paying tax on it in Spain.

I also had a look at offshore accounts but notice that with most of them your money is not protected if the bank collapses.


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## Lucie123 (Dec 7, 2011)

Thanks for that info. re the normal online savings account. they normally have a bonus that lasts a year so realistically you wait until you have been out of the uk for just under a year and then open a new account so you can go for two years with a uk based account with decent intrest.before you become a non uk tax resident after being out of uk gor over a year


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## brocher (Mar 21, 2011)

Lucie123 said:


> Thanks for that info. re the normal online savings account. they normally have a bonus that lasts a year so realistically you wait until you have been out of the uk for just under a year and then open a new account so you can go for two years with a uk based account with decent intrest.before you become a non uk tax resident after being out of uk gor over a year



You become a non tax resident when you have been out of the UK for a full TAX year (5 April to 5 April) i.e. if you leave the UK in May 2012 you will still be tax resident until April 2013. If you remain out of the UK from April 2013 to April 2014 you will be non tax resident for that tax year.

I've only looked at moneysavingexpert so far, but there seemed to be several accounts which had no bonus periods. One I noticed is a Virgin, instant access, internet access, min £1 deposit, unlimited withdrawals, 2.85%. Might be better ones but that was just on a quick look.

And.... thanks, lucie, for your post or I would not have realised you can not transfer existing ISA's - never entered my head that would be a problem.


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## Gettothepoint (Feb 21, 2012)

Stravinsky said:


> I kept all my accounts and credit cards going when I left. I kept an ISA running for about 5 years.
> 
> You _can_ open accounts with some banks in the UK when you reside elsewhere, and for instance HSBC seem quite happy to keep accounts open even when you are abroad.


Correct!


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## gus-lopez (Jan 4, 2010)

So does Lloyds/Tsb. I just changed the address's on the accounts to here in Spain.


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## Alcalaina (Aug 6, 2010)

gus-lopez said:


> So does Lloyds/Tsb. I just changed the address's on the accounts to here in Spain.


Me too, but they won't let you open a new account (e.g. a websaver) unless you are UK resident - even if you already have an account with them.

So if you are likely to want a £ savings account in the future, open one with £5 in it before you go!


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