Tax on savings

[Linda Irvine]

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[TD]Hi, we are mulling over whether or not to return to the UK, nothing decided. We are just wondering if we can leave money here in a Term Deposit if we did go back, as it's a higher interest rate, or would we be taxed here and in the UK? Any advice would be appreciated.

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[cowgirlfromhell]

I have the same question....sorry I hope someone answers and it be good news?!

[Notts]

The bank will deduct 10% withholding tax from the interest and pay it to the ATO - you won't need to complete an Australian tax return. You will need to declare the income on your UK tax return, and will get a tax credit for the amount of withholding tax paid.

[cowgirlfromhell]

So Linda worth keeping savings in Oz do you think or maybe the old fashioned idea of stashing cash under the floor boards be better In the longterm?!?

[Gbye grey sky]

If you are intending to return one day and will not need the money for some time then it may be better to leave where it is depending on the rate of interest you are getting. What rate are you getting in Oz?

 

Also if you have money in a term deposit there are normally 'penalties' for withdrawing before the term ends.

 

Whilst you can start moving money to the UK and investing in ISAs ( tax free savings accounts) there is a maximum amount you can invest each year, though from 1 July you can invest up to £15,000 each this tax year. The problem is that interst rates are typically around 2% maximum (fixed terms) - shop around for best deals.