RetireJapan

I have been thinking about cash in the UK.

The situation is I am about to receive cash in an old UK endowment, I have a mortgage, and the property is being rented out.

So I was wondering if anyone had the same predicament.

So I will have about 35,000 pounds deposited into my bank account in the UK.
Being non resident I don't think I can open another high interest bank account,or a ISA ( NISA equivalent) or put it into an investment fund in the UK.If anyone know otherwise please let me know.


But If I bring the money to Japan, that will also show up in my bank or trigger some lightbulb moment in the tax department, triggering higher taxes for me in Japan, and I'm not sure how much I can bring over before triggering those penalties.Has anyone brought much here?
If I could bring the money over I would reinvest it either into my IDECO or a NISA.

But another thought popped into my head while looking at my two statements,
My mortgage is 1.74% and my Bank interest is peanuts,0.5%ish
So I could just pay that off the house. However, I've re-evaluated my position as I'd rather just sit with the debt, and let my tenant pay the whole thing off, while trying to re-invest the endowment money as the return is higher than paying off 1.74% on the mortgage.
My vanguard account has returned about 8% and the Mortgage is 1.74% so the difference is nearly 6% So I'd rather put the endowment money into gaining that 6% difference.

Unless I'm tying myself in knots over thinking stuff.

Any help or advice would be helpful and thank you in advance.

The UK and Japan share financial information now. Attempting to evade taxes by carting cash around could end badly.

And regardless, if you're a tax resident of Japan and owe taxes, just report and pay them. You'll sleep better and I won't have to delete your account for soliciting advice on how to break the law on my forum.

Would the payout from an endowment count as pure income? I ask because I don’t fully understand endowments as ‘financial products.’ If you are permanently resident here for tax purposes, any income/gain anywhere is liable to tax here, it doesn’t matter if you bring it here or not. If you have been here for less than five years in the last ten, it’s a different story. Leaving it in the U.K. would not trigger tax here, though bringing it here would.

RetireJapan wrote: ↑Tue Feb 02, 2021 1:37 pm The UK and Japan share financial information now. Attempting to evade taxes by carting cash around could end badly.

And regardless, if you're a tax resident of Japan and owe taxes, just report and pay them. You'll sleep better and I won't have to delete your account for soliciting advice on how to break the law on my forum.

Thanks for that advice.
Absolutely! I wouldn’t want to evade any law , infact
I’d like to know what the law says. So that I can stay within it. Eg limits on cash being brought in.
Tax bands and earnings, I’d be the first to say stay within the law, but I don’t want to transfer money and find out that I’d have been better to keep money in the UK.
Etc. anything that lets us sleep better at night is a good thing in my book.

The endowment in the UK on maturity and to time limits on maturity are TAX FREE in the uk.
And should that actually be classed as income when the whole purpose of the financial product was to pay off a mortgage.
Tax free at the country of origin but the second country wish to tax it when it has a specific purpose. This would seem rather draconian.imho.
Update:
I found this, so long as we don’t remit the cash then according to this then we don’t have to pay anything in taxes if within the time period.
https://www.greenbacktaxservices.com/bl ... -in-japan/

Beaglehound wrote: ↑Tue Feb 02, 2021 1:52 pm Would the payout from an endowment count as pure income? I ask because I don’t fully understand endowments as ‘financial products.’ If you are permanently resident here for tax purposes, any income/gain anywhere is liable to tax here, it doesn’t matter if you bring it here or not. If you have been here for less than five years in the last ten, it’s a different story. Leaving it in the U.K. would not trigger tax here, though bringing it here would.

Thanks for that.
An endowment was a savings scheme we had way back in the 80s. You saved regularly into a fund, who invested it in the stock market.
The home owner would only pay the interest on the loan and at the end of the term, the endowment should have grown to repay the capital on the mortgage, and hopefully have grown a bit extra which the home owner could keep. Early on it was good in the early 80s and then it went down the river and mid-selling was rampant. Anyway I kept mine just for the life insurance element in it too.
Anyway it’s going to mature this year, wether this would be classed as income I have no clue because it was supposed to pay off the mortgage.
But as I mentioned above I’m wondering if it’s better to put that money to work in a fund ( taking into account taxes here over the long term) or just to pay off the mortgage?
But then again then leaves the possibility of rental income? Which We wouldn’t touch anyway?
That advice confirms what I thought. Leaving it in the UK wouldn’t or shouldn’t trigger anything here.

Ok, so I get from your answer that you are still a non-permanent resident for tax purposes (under 5 years in the last 10). So don’t even think about remitting the endowment cash to Japan at the moment

As far as I am aware there would be nothing to stop you remitting the endowment cash here in future (but not in the year you receive it) should you prefer to invest it here rather than paying off mortgage. Don’t just take my word for that though, it’s only my understanding.

Bubblegun wrote: ↑Tue Feb 02, 2021 3:13 pm Eg limits on cash being brought in.

Moving money is not a taxable event as long as you are not permanently tax resident (have been here for more than five of the last ten years). If you are permanently tax resident, you may be liable to pay tax whether you move the money or not. After figuring that out and paying any taxes owed, you can move as much money as you like without paying further taxes.

If you are not permanently tax resident, you may not owe taxes on the money. In that case, leave it in the UK until the following tax year, when you can move it without any consequences.

However, at the end of the day you need to consult with a tax accountant or the tax office to figure out how your situation will be treated under Japanese law. And let us know what you find out, because that may be useful for others too

RetireJapan wrote: ↑Tue Feb 02, 2021 1:37 pm The UK and Japan share financial information now.

Any idea on what kind of information is shared? Where I'm domiciled for tax purposes, yearly income, how much I have sitting in the bank, investments etc.? I'm just curious...
Thanks!

Mainly this: https://www.retirejapan.com/blog/intern ... reporting/

New article today: https://japantoday.com/category/nationa ... ax-evasion?

RetireJapan wrote: ↑Wed Feb 03, 2021 4:35 am Mainly this: https://www.retirejapan.com/blog/intern ... reporting/

New article today: https://japantoday.com/category/nationa ... ax-evasion?

Ahhh... gotcha. Thanks for the reading material...
I was just wondering if HMRC would be automatically up to date with my annual income so I wouldn't have to keep sending off photocopies of my payslips every year for them to calculate my student loan repayments... But it looks like this is more for tax purposes...?