UK banking

I have just received a letter from my Halifax bank in the UK telling me that I am not eligible to have an ISA account anymore as I am deemed a a non UK tax resident . Apparently this does not apply to my pensions as these will continue to be taxed.

I was informed that If you open an Isa while you live in the UK then move abroad, you can keep the Isa open and still get the tax relief on the money held in it . However you cannot add to it or open a new Isa You must however declare the Isa on your spanish tax return 

You can keep an existing ISA which pays interest tax free and, yes, you should declare the interest in Spain where it is taxed. You cannot transfer thie ISA nor can you open a new one if you are a non-resident. If the rate becomes uncompetitive you would normally transfer it to someone else. As a non-resident you can't so you would be stuck with the original provider.

Apart from government pensions (civil service, armed forces, fire/police etc) you should not pay tax in UK but should in Spain. However , I know from experience how difficult it is to get HMRC to stop taking tax off any other type of pension. Despite completing the correct forms and sending a letter explaining, all I got back was as standard form letter which said they would look into it. I've had the same letter for three years.

Same with banks. Trying to get a bank to pay interest without tax meets with a stony "you need to contact the HMRC" and I'm back to square one. Even after one acknowledgement from HMRC that my state pension would be paid free of tax, they then charged extra tax on my armed forces pension. I think it's costing me as much in postage as I'll (eventually) get back.

Bob stick with it.

About 25 years ago,  I notified Inland Revenue, that I was resident in Spain. They sent some paperwork which I took to Hacienda, who completed their part and started liaising with I.R.  Maybe I was lucky as it went without a hitch. 

Since then my Police Pension has been  taxed in UK and all other income is declared in Spain.  Resulting in 2 tax free allowances saving me about £1,000 p.a. in tax (about to be revised though)

My UK bank have never agreed to paying interest gross. It used to be that one could claim refund from the tax man in UK, however, one only got 8% back. The remaining 12% could then be offset against any Spanish tax liability.  Which I never managed to get my gestor to understand. 

That said: I recently enquired about the tax stopped on the 65+ bonds, which again cannot be paid gross.  Good news,  now the UK taxman will refund the whole amount stopped by banks etc:  I think it is a form R43

PS     I know an ex UK  prison officer who has always, incorrectly, declared his crown pension in UK.    I estimate he has paid around £15,000 more in tax than he would have done had he declared his OAP in Spain, as required by law.  And even worse, he could still get a bill from Hacienda and fined for not declaring in Spain.

HMRC have stopped seeing tax payers at their offices, in my experience they never answer the phone and if they don't have an on line form that suits your purposes, you might as well forget it. I have 3 pensions,1 state and 2 private, they are fully aware of these but always tax the wrong amount after applying my coding.

As for ISA's, there are many none ISA cash deposit accounts that pay more than some ISA accounts, if anyone is interested my findings show that the Yorkshire/Clydesdale Bank's 40 days notice ISA account currently paying 2.00% p/a interest is the best that I could find, I can't see the point in tying up money for years just to get half a spot more. 

Johnx why is the ex prison officer " incorrectly " declaring his crown pension in the UK?

Thought you did declare crown pensions in the UK?

Or does this not apply to prison service pensions?

Johnx why is the ex prison officer " incorrectly " declaring his crown pension in the UK?

Thought you did declare crown pensions in the UK?

Opps,   Should have said he was declaring his Crown Pension AND his State Retirement pension (OAP) in UK.

Hi Scubamike

Yes you are right you can keep an isa if it was opened before you left the Uk but if you look at it after 12 months the interest will be reduced to something silly like 0.50% and you will not be able to change it

Hi Shytalk

I don't think that is correct For quite a few years now I have been taking  the interest from my Isa's and I have just looked at last year's figures and they achieved in the region of 5% which I declared as untaxed income on my spanish tax return 

scuba,

Is your ISA a cash ISA, if so are you in the final year of a 5 years fixed, if not please tell us who you are with, because the best that I can find is a 2.00% 40 days access account.

Hephaestus I sending you a pm 

Hi Scubamike

The figures i quoted is from an Halifax ISA which after one year reduced to 0.20% with no way to start a new ISA because i am not a tax resident in the UK.

And there's the problem. I had a fixed term savings bond (not tax free) which paid 3%. When that ran out the new terms were 1.45% (before tax) but no chance of opening one with another bank because non-residents in UK can't open new accounts unless you go offshore which, in many cases, pay less and have to be declared anyway.

My "reserve" account in UK pays 0.5% which is still taxed at source as the bank wouldn't accept my R43 and HMRC told me to declare I'd paid tax in UK. 

Hi

I believe Hargreaves & Lansdown are paying up to 4% per annum on some of their Long Term Unit Trust Investments with a small dividend paid out quarterly ,specifically with  Woodford Investment Management . Here is their website http://www.hl.co.uk/ .

Overseas Investors have to fill out what is called an " Overseas Vantage Fund & Share Account Application."

Quote

As we are regulated by the FCA (Financial Conduct Authority), under European law our FCA regulation allows
us to accept business from clients who live in countries which are members of the European Economic Area
(EEA). As a result we can accept business from nationals of the following European countries: Austria,
Belgium, Bulgaria, the Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany,
Gibraltar, Greece, Hungary, Iceland, Italy, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta,
Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain (including the Canary
Islands) and Sweden.

unquote

Good Luck