The Lemon Fool

Many apologies if this is the wrong board for this post....well I know its the wrong board per se, but there are a fair few voices on here whose opinions I respect, so wanted to hear views from the denizens of the High Yield board.

In a nutshell:

i am currently living the expat life, but considering returning to normality within 12-15 months (normality is either UK or Australia).

We have an unencumbered property in the UK but think its unlikely we would ever permanently live in it. Property is earning a very mediocre yield (c. 1.8%) excluding any house price rises (or falls).

If we move back to the UK, we would be liable for a fairly hefty CGT bill (100k+), whereas if we sell whilst we are still abroad, CGT is zero.

I am trying to come up with sensible options for how to keep the funds reasonably accessible (3-6 months access) in as safe a vehicle as possible (fraud, bankruptcy and risk) with a better return than 1.8%.

Possibly a mix of money market and bonds? Any suggestions? We have a significant amount in equities already, and I don't feel comfortable injecting this quantity into the market at one time!

Thanks in advance for your ideas!

Street66 wrote:I am trying to come up with sensible options for how to keep the funds reasonably accessible (3-6 months access) in as safe a vehicle as possible (fraud, bankruptcy and risk) with a better return than 1.8%.

Corporate Bond ETFs might fit the bill. Capital is a bit at risk should interest rates rise.

Street66 wrote:...

We have an unencumbered property in the UK but think its unlikely we would ever permanently live in it. Property is earning a very mediocre yield (c. 1.8%) excluding any house price rises (or falls).

If we move back to the UK, we would be liable for a fairly hefty CGT bill (100k+), whereas if we sell whilst we are still abroad, CGT is zero. ...

Not your question but are you certain on the UK CGT position?

Capital Gains Tax for non-residents: UK residential property
Find out if you need to pay Capital Gains Tax as a non-resident selling a UK residential property.
https://www.gov.uk/guidance/capital-gai ... l-property

See also https://www.gov.uk/guidance/capital-gai ... in-or-loss which suggests using the market value at 5 April 2015 if you owned it at that date is an option, which might mean you'd be nowhere near the £100k CGT bill if sold in a full non-resident year but best to be aware, not least for the filing requirements.

There's been some discussion of split year treatment recently over at Taxes. There might be some interesting links here viewtopic.php?f=49&t=11041 (although primarily about Income Tax) which you may like to read, as it also includes comments on RDR3: Statutory Residence Test https://www.gov.uk/government/publicati ... e-test-srt.

Yes - we've had our tax accountant provide estimates for various scenario's, but thanks!

Street66 wrote:
In a nutshell:

i am currently living the expat life, but considering returning to normality within 12-15 months (normality is either UK or Australia).

We have an unencumbered property in the UK but think its unlikely we would ever permanently live in it. Property is earning a very mediocre yield (c. 1.8%) excluding any house price rises (or falls).

If we move back to the UK, we would be liable for a fairly hefty CGT bill (100k+), whereas if we sell whilst we are still abroad, CGT is zero.

I am trying to come up with sensible options for how to keep the funds reasonably accessible (3-6 months access) in as safe a vehicle as possible (fraud, bankruptcy and risk) with a better return than 1.8%.

Cash.

It sounds like you have a bigger "life decision" to make first. In the meantime, forego the mediocre yield chasing.


(PS. You're not my brother in disguise are you? )

It sounds like you have a bigger "life decision" to make first. In the meantime, forego the mediocre yield chasing.

Hah! Yes - lots of decisions to make, all of which impact others and proving to be a rather difficult exercise with my wife and i displaying very different risk appetites!

Think you may be on to something... Cheers!