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Working Overseas And Banking

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Hello dear HPCers,

I'm due to start work abroad (first time working abroad) and require information regarding banking. Grateful for your advice.

My situation: Due to start work abroad, being renumerated in US $ dollars (but not based in US / Americas). I'm a UK citizen with UK bank accounts. Salary being paid gross.

Pointing my salary to my UK bank account and withdrawing abroad with my debit / credit cards is no problem. Though this raises the concern of being hammered with transaction and foreign currency fees when salary is paid in and when withdrawing cash abroad.

So first obvious question is what is the best solution in my case where I can avoid these transaction fees (or pay very little). Secondly, I am guessing a US $ account would be beneficial in my case, since I will be based abroad and there will be very little need for me to convert US dollars to UK pound sterling (maybe once every 6 months, or longer).

A friend of mine has suggested opening an account in Isle of Man / Channel Islands. Is this the best advice and would I need to travel there first to open an account?. Sorry, a complete novice here.


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Many years ago, I was posted to the Middle East, (for a proposed period of 3 yrs, which ended up being longer), and was paid tax-free in the local currency, which at that time was pegged to the USD. (So essentially it was USD.)

I opened a local bank a/c for salary to be paid into, (in local currency), and then transfered roughly half my salary into GBP most months. (Kept half for living expenses.) This money was sent to an a/c I had opened offshore in Jersey, with same bank I used onshore in UK.

Offshore is the way to go IMO.

Nb I didn't have to go to Jersey to open an a/c. All was done by letter. (Pre online days!)

Might be a bit more involved now, as all banks are now annoying in this repsect, eg asking for certified copies of UK passport, work contract, salary slips, and/or utility bills from overseas. (So ask banks what paperwork they would require for you to open an off-shore a/c, but all can be done by mail/phone.)

Some of my colleagues transfered less frequently than monthly, to reduce transfer costs which were fixed, and about £25 per transfer, IIRC.

The transfer rate to GBP, (which was given daily at the local bank) varied daily, was also open to some negotiation eg "can I please get a better rate for a transfer of X,XXX amount?". (I usually got a slightly better rate like this, simply by asking for it!) And I used to watch the daily rates and try to pick a 'good' day to do my transfer. (But no-one can really say which way rates will go, so essentially it will always be a guess.)

My exposure to currency fluctation, (ie USD versus GBP, like your situation), was then limited to monthly changes in rates. (Nb I wanted all my savings to be in GBP not USD.)

Before I went abroad, I told my UK bank I would be becoming UK "non-resident (for tax) and I opened an offshore a/c with them (in Jersey) which gave me tax-free savings. I had various fixed term deposits (FTDs) for better rates, which I rolled over every 6 months or so. (I must have also sent GBP to my onshore a/c for bills.)

I was clearly considered a "non-resident", from day one of my posting, due to the proposed length of my overseas contract, as long as I obeyed the visit rule of not > 90 days per year etc. (Nb At that time, 3 yrs working overseas was the min proposed period to qualify as "non-resident". Not sure if still the same now.)

Nb You also need to consider your UK tax status!! Working overseas tax-free is great, but watch out for UK tax being applied. You need to avoid UK tax if you can ... by obeying all the rules.

Normally, if you work abroad for a certain period, your earnings can be sent back to the UK without any UK tax to pay, but the rules are quite complex. So it really pays to know what you are doing.

If you do not (yet) have a tax advisor, maybe start by seeing your bank manager and asking for some basic info? Then google and check out the expat forums and HMRC website etc. (Or pay for some independent tax advice.)

Good luck! It's (usually) fun working overseas!

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  • 407 Brexit, House prices and Summer 2020

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      • down 5% +
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