Question regards owning foreign currency

[ynot]

Hi. Can anyone enlighten me on the following .
1/ Can i open a UK bank account with the intention of holding UK currency. [I live and work in NZ.I am a NZ citizen]
2/ How and where do i pay the tax on the funds in such an account.
3/ Any idea what return i can expect,say locked in for 12 months.
thanks.

[OldRider]

Yes you can, I had one for many years but closed it this year, was with Barclays. I don't know how difficult present regulations might make it now to open an account

UK bank charges are expensive and increasing, returns were near nothing, and they were pushing up the balance required to retain low fees.

I could find no reason to keep the account.

Looking at the last bank statement Interest rate on balace up to 10,0000 pounds - 0.1%
over 10,000 pounds 0.15%.
On balance of less than 2,000 pounds annual fee 40 pounds.

To transfer funds out of account online 25 pounds, higher for telephone or fax.

[Deev8]

There is no reason why a New Zealand citizen, who is resident in New Zealand shouldn't hold a UK bank account. I've had a British bank account for a long time, but it was opened when I lived and worked in the UK.

Unfortunately it has become progressively more difficult to open an account over the past five or six years. Anti money-laundering measures require multiple proofs of identity and address with the upshot that some banks just don't want to bother with overseas customers.

quote:Originally posted by OldRider

UK bank charges are expensive and increasing

My experience has been completely different - I've never paid a penny in fees for my British bank account, that's a sharp contrast to my New Zealand account.

Interest rates are lower in the UK, in fact they are lower almost everywhere outside of New Zealand. A savings account will pay 5% to 6% gross interest. There's a comparison of some of the higher interest savings accounts here: Compare Savings Accounts A current account would typically pay low interest - 2% or less. But in return you should expect to pay no monthly account fee or transaction fees. What's more, most current accounts don't have any minimum balance requirement, so you can keep most of your cash in an internet-accessible linked savings account with a reasonable interest rate. There's a comparison of some current accounts here: Compare Current Accounts

If you do open a UK bank account, you should complete a UK Revenue and Customs declaration which will allow the bank to credit interest to your account without deducting any tax.

Any interest earned on an overseas account should be declared on your New Zealand tax return as overseas income.

[Sideshow Bob]

My experience is the same as Deev8. Opened when I was in the UK (Lloyds), no fees, almost no interest, no transaction fees, no minimum balance & internet banking. When I was there, it was pretty difficult to open a new account - needed utility bills with your name on it to open, plus other ID and proof of regular income. It was a of a circus to get opened - you need ID and a bank account to get utility in your name or other proof of address.

Not sure if some of the NZ banks open accounts in the UK. Might do, but would be at a cost.

Other option is the foreign currency accounts that most of the main banks offer.

[ynot]

Thanks guys.
Devee8's "Compare Savings Accounts" shows the banks at the top of the list nearer 6%.
Aspex,do you have a preference for the Jersey bank or are those advertising 6% ok?

[Deev8]

quote:Originally posted by aspex

Most of the higher interest offers restrict themselves to UK residents eg ING

That's true. What's more it's possible that even if the bank will allow non-residents to hold an account, they may not give access to their highest interest accounts. My account with National Westminster Bank pays 4.25% interest - but if I were still resident in the UK I could have a different account with the same bank that pays 4.75%.

[Snoopy]

quote:Originally posted by Deev8

There is no reason why a New Zealand citizen, who is resident in New Zealand shouldn't hold a UK bank account. I've had a British bank account for a long time, but it was opened when I lived and worked in the UK.

Unfortunately it has become progressively more difficult to open an account over the past five or six years. Anti money-laundering measures require multiple proofs of identity and address with the upshot that some banks just don't want to bother with overseas customers.

I think you guys are out of date. The only way you can open a UK bank account now is to live there. You have to roll up to the bank in person with proof of identity and an English utility bill with your name on it.

My cousin is English and she can't open an English bank account even though she was born in England, lived in England for most of her life, and travels on an English passport! She now lives in Australia BTW which means she isn't eligible.

SNOOPY

[Deev8]

quote:Originally posted by Snoopy

I think you guys are out of date. The only way you can open a UK bank account now is to live there. You have to roll up to the bank in person with proof of identity and an English utility bill with your name on it.

It's almost two years since I opened a new UK bank account from New Zealand, and I'm not surprised that it has become more difficult to do that.

However there is no regulatory requirement to present yourself at a bank branch. That's just the way that some (or possibly most) banks choose to operate - it makes it easier for them to meet their regulatory obligations. Avoiding the need to do that certainly involves sending certified copies of documents to the bank, including the identification page from a passport.

So I don't think that it would be easy to open a new account today, but I believe that it might still be possible.

[patsy]

It may pay checking if Thomas Cook still offers a service to open a savings account with the Midland Bank from NZ. I remember it was heavily advertised a few years ago. The service was especially introduced for the convenience of those going to the UK on OE.

[CJ]

quote:Originally posted by ynot

Hi. Can anyone enlighten me on the following .
1/ Can i open a UK bank account with the intention of holding UK currency. [I live and work in NZ.I am a NZ citizen]
2/ How and where do i pay the tax on the funds in such an account.
3/ Any idea what return i can expect,say locked in for 12 months.

Why do you want a UK account? Would a NZ based foreign currency account be ok (I am sure most banks do it).

My experience is no fees, no interest. Can get interest bearing accounts (halifax is about 6%??) but have never got around to it (shame on me).

You will still be taxed in NZ, even if not taxed in the UK.

If you need to open an account, just go to your NZ bank and ask them to do it for you. When I wanted to do it (3 years ago), ASB had no issues but you needed to open with £1,500. Might have changed since.