Living overseas but saving/banking in the UK?

[glacierchick]

I'm not quite sure if this should be in the living overseas or money sections but I need a little advice around savings and bank accounts and the like.

I have lived abroad a while and maintained my then standard UK bank accounts. However I would now like to open a new savings account for some small amounts of income I get from renting my flat in the UK out.

It seems that most banks require proof of residency in the UK, but I could for example use my parent's address for this, however that sounds a bit like fraud, which I'm definitely not prepared to do, so how do you deal with these things?

I have btw looked at International and expat banking but the amount of money required is ludicrously high and the rate of interest ludicrously low, I would get a much better deal with a UK bank or building society or even at NS and I who do offer accounts to non-residents as far as I can tell.

Any suggestions?

I assume that you are not a UK tax payer either? I seem to remember that there used to be a loophole that meant you could open a UK account without residency if you were.

I think you may need to look at offshore accounts (HSBC has them in the channel islands)

Offshore accounts don't always require a large deposit, but interest rates are low. I think Santander on the Isle of Man has a low initial deposit. Fixed term bonds offer a better rate, but you will be locked in for 2 to 3 years. If you live in the EU you will need to opt for exchange of information with your local tax authority or they will deduct tax. Premium bonds are another option. Minimum purchase is 100 gbp, but you don't need to be a UK resident and prizes are UK tax free.

Premium bonds - depends where you are. I'm in Texas and had a message from NS&I saying that new USA rules concerning lotteries and prize winnings meant that I was no longer allowed to hold premium bonds overseas. I'm in my forties and was given them as christening presents - it was surprisingly upsetting to have to cash them in....

I don't think you can hold premium bonds if you are a US resident but not a problem in other countries.

We bank with First Direct but aren't allowed to open new accounts and now get atrocious rates.

It's to do with the "know your customer" money laundering regulations and it is a pita. I wouldn't use your parents address if you aren't registered there - I expect they check the electoral role anyway.

First direct offshore in the Channel Islands works. Avoid the Isle of Man. It's a byword for tax evasion sadly.

Interest rates are terrible but I see it as a way of parking money so I don't have to pay transaction charges or account fees. If you are in the US they will have you fill out additional forms. It is a PITA.

The Isle of Man is not a byword for tax evasion - that's a ridiculous statement - no difference between it and the Channel Islands. It's allowed to set its own taxation and rules.

I live abroad and have a First Direct account with my foreign address.

I'm only repeating what officials have told me. I'm a CPA working at big4. I have dealt with my fair share of IRS agents going after hidden income.

Thanks for the suggestions ladies. I was surprised to hear you could hold NS&I accounts as overseas residents, but apparently that is true - apart from premium bonds in the US! (Though of course none of them are tax free outside the UK...).

I was hoping to avoid the international accounts as they have a truly terrible rate of interest.
What I really want is a nice savings account, with a half decent rate of interest but that seems scarce as hens teeth right now, even in the UK...

We had the same issue, really really wanted a Santander 123 account but just not possible if you are not resident. Also can't add money to an ISA even if you already have one open. Ended up putting money in a stocks and shares account offshore. It's doing well but has has huge penalties to get the money out before a fixed period is up which is a total pain when circumstances change - as they have! Everything else has practically no interest.

the only way to get vaguely realistic interest rates in the UK is via various bank accounts; link them together and you can average 3% on around £40k in total per person. But you need to be UK resident, I think.

you can get about 2% on fixed-rate bonds. Whoopee...

If you use online banking, e.g. with Lloyds, you can open a savings account online in a matter of clicks, can't you?

Not if you are non-resident.

I'd use the parents' address; the bank would never find out because it doesn't really matter.

To crack down on money laundering and tax evasion, banks and investment companies are supposed to have good i.d. for account holders, which they share with the tax authorities, and most countries have to agree to share with each other.

Your bank will know your name and d.o.b. and probably your NI number, which is key to matching data from numerous sources. They may know your passport no. as well; but if not, your government does, and so does the country you went to.

I have a small investment in a US company I used to work for. Not only do they deduct Witholding Tax on the dividends, the US tax authorities repeatedly make me fill in tax declarations. They grudgingly concede that as I am not a US citizen, and do not reside in the US, they will not make me fill in a US tax return.

Flobberty's advice is naive. The bank will ask for proof that you reside at that address. I have been an expat for over 20 years and it has become increasingly difficult to open new bank accounts - the need identification info, proof of address an details of source of wealth.

You could open an HSBC account.

As others have said, it has become increasingly difficult to open a UK bank account as an expat. We've been overseas since 2001 but had to switch offshore accounts a few years ago as our branch closed. It was very very difficult without having a massive initial deposit, plus being happy to keep that as a minimum balance. We managed to get one through Standard bank in the Isle of Man in the end but it wasn't easy. Good luck!