Hi ,
I have been a silent observer of you various threads & appreciate the knowledge you guys posses in the Investment sector.
May be you gurus can push start me into my long journey into the investment world.
I am 37 yr old British citizen with an OCI & am planning to return to India in a few months (Oct 2007 ) , have a net worth of around $2,15,000 , of which I have already invested around $1,00,000 in the India real estate. The plans with the rest of the money is to build a house & invest some amount in stock/ bonds on regular basis......whether it's in UK, USA or India.
The thought of investing in the stocks has been with me for over a decade , but never had the luxury of finances to play with , but now I feel that I must make a foothold before it's too late. Reading others feedback I realise that it might not be a good time to enter the game , but then I also realise not being invested would even be a greater mistake, & I feel that, if one stays invested for a longhaul then it should'nt really make much of a difference .
Ideally I would like to invest in companies or Funds with a long term return but at the same time wouldn't want to miss out on the short term gains the market has to offer,either.... maybe you can suggest me mix of spread & few companies like Fidelity in US, any in UK as well.
By now you may have realised, that how little knowledge I have on this subject , that I can't even ask a correct question..... but maybe with a few knowledgeable people like you around , it shouldn't take me very long to learn to swim ...
Disclaimer & A pledge :-10 % of all the gains would go the worthy causes in my Motherland (India) . I alone would hold myself responsible for any decision I make . You are simply sharing your wisdom .
Thanks for the read .
Regards
Mints
A Layman Needs Advice
A Layman Needs Advice
mints;26440
I am 37 yr old British citizen with an OCI & am planning to return to India in a few months (Oct 2007 ) , have a net worth of around $2,15,000 , of which I have already invested around $1,00,000 in the India real estate. [/quote]
Is this a plot, a flat? What is the purpose? Investment or for living here?
mints;26440
The plans with the rest of the money is to build a house & invest some amount in stock/ bonds on regular basis......whether it's in UK, USA or India. [/quote]
I am assuming that this is the house to live in.
" invest some amount " How much?
[quote]
The thought of investing in the stocks has been with me for over a decade , but never had the luxury of finances to play with , but now I feel that I must make a foothold before it's too late. Reading others feedback I realise that it might not be a good time to enter the game , but then I also realise not being invested would even be a greater mistake, & I feel that, if one stays invested for a longhaul then it should'nt really make much of a difference .
Ideally I would like to invest in companies or Funds with a long term return but at the same time wouldn't want to miss out on the short term gains the market has to offer,either.... maybe you can suggest me mix of spread & few companies like Fidelity in US, any in UK as well.
[/quote]
You need to define a goal or a purpose for this money. Is this money for buying a new car in five years or is this for your retirement? If it is for your retirement, then when do you expect to draw down on this one? At age 45, 50, 55. 60, 65?
The answers make a difference as to how and where you should invest.
When you return to India, where would your day to day living expenses come from? If from a job, then do you expect to save anything from salary also? If so, what would be estimated savings per year?
[quote]
Disclaimer & A pledge :-10 % of all the gains would go the worthy causes in my Motherland (India) . I alone would hold myself responsible for any decision I make . You are simply sharing your wisdom .
[/quote]
This is very laudable. Charity and helping those in unfortunate circumstances not from their own actions is indeed commendable. Remember also that charity begins at home and you have to make sure that your retirement needs are also met.
Are you married (no, I am not trying to hook you up)? Just trying to find out from Financial planning perspective. If yes, kids? how many and ages?
A Layman Needs Advice
Thanks for your precious time.
$60000 will set aside comfortably for investment , for retirement (around 55 yrs) , of which you can consider $15000 for high risk play .
Have a little family with very basic needs ( 6yr old son & 4 yr daughter).
We plan on taking our professions & having a monthly take home of around Rs 70000 ( £1700 approx) , of which we can afford to say around Rs 20000 ($500).
(Have'nt considered a wealthy Mother-in-Law, yet in my plans....might be a windfall :emwink: ).
Regards
$60000 will set aside comfortably for investment , for retirement (around 55 yrs) , of which you can consider $15000 for high risk play .
Have a little family with very basic needs ( 6yr old son & 4 yr daughter).
We plan on taking our professions & having a monthly take home of around Rs 70000 ( £1700 approx) , of which we can afford to say around Rs 20000 ($500).
(Have'nt considered a wealthy Mother-in-Law, yet in my plans....might be a windfall :emwink: ).
Regards
A Layman Needs Advice
Investments and taxes are linked. You stated you are a British citizen and I am unfamiliar with the tax laws of UK. US citizens for example have a very high tax burden if they were to invest in mutual funds for example in a foreign country ? I do not know if there are similar laws in UK. This would require some investigation on your part or comment from some others who may be well versed in UK tax law.
Based on information you have provided, I would suggest that you probably should have about 50% to 60% in equities.
So let us take one example where equities are 56%.
This means 44% in fixed income.
Fixed income monies should be invested in India.
Options for this are:
Fixed deposits,
Fixed Maturity Mutual Funds (these are basically fixed deposits)
Floating rate Mutual Funds
Intermediate Term Bond Mutual Funds (this is the preferred long term option).
While Intermediate Term MFs are the preferred long term option, in India at present, shorter maturities are paying higher yields and hence I have mentioned the other 3 options. Ideally I would go for the first 3 options and gradually switch into the fourth one ? the Intermediate term bond mutual fund.
It is extremely important to understand UK tax consequences before you invest and unfortunately, I do not know anything about UK taxation. Hence any of what I write has to be evaluated from tax perspective before going for those investments.
56% in equities. ($33600)
17 % in Indian equitites ($10200)
17 % in US equities ($10200)
22 % in global equities ($13200)
For Indian equities, I would select two options as follows:
A Nifty Index Mutual Fund ($7200) (Option to be selected ?Growth?)
A Midcap Mutual Fund ($3000) (Option to be selected ?Growth?)
For US equities, I would select Vanguard VTI or VTSMX with Dividends reinvested option
For Global equities, I would select
Vanguard VGTSX or EFA (this is an ETF) for $10,200)
Latin Markets ETF ILF for $1600
African Market ETF EZA for $1400.
For Future investments, you have indicated that you will save approximately $500 a month which is about $6000 a year. My recommendation would be to save about 60% of this in fixed income and 40% in equities. The 40% investment in equities will be in Indian equities.
The above will result in increasing your fixed income portion every year increasing from the current 44% suggested. As you get closer and closer to retirement, you want to bring the quity portion down to your comfort level in retirement and this could range from 0% to 50%. Depending upon asset base, risk tolerance, each individual makes this decision. Even in low tolerance retirement situation, I suggest up to 20% in equities, else somewhat higher. As you get closer to retirement, your AAP ratios need to get more conservative.
In addition to above, your Indian equity percentages will keep growing as your new equity monies (annual savings) will be going in Indian equities.
Any time, your portfolio is out of whack from the desired AAP percentages, it is probably desirable to readust by altering the new investment ratios to get to desired targets soon, rather then by selling etc. Selling and rebalancing portfolios may have tax consequences which will have to be looked into anytime you engage in such. If the portfolio is significantly out of whack, then rebalancing by selling should be considered.
I have to reemphasize the above suggestions are totally oblivous to tax law and tax law must absolutely be considered to see tax ramifications. In addition legalities should also be looked into as to UK law on foreign investments. So you should look into the tax ramifications before embarking on any investments. Hopefully someone in the forum will comment.
Hopefully this has given you enough pointers.
Based on information you have provided, I would suggest that you probably should have about 50% to 60% in equities.
So let us take one example where equities are 56%.
This means 44% in fixed income.
Fixed income monies should be invested in India.
Options for this are:
Fixed deposits,
Fixed Maturity Mutual Funds (these are basically fixed deposits)
Floating rate Mutual Funds
Intermediate Term Bond Mutual Funds (this is the preferred long term option).
While Intermediate Term MFs are the preferred long term option, in India at present, shorter maturities are paying higher yields and hence I have mentioned the other 3 options. Ideally I would go for the first 3 options and gradually switch into the fourth one ? the Intermediate term bond mutual fund.
It is extremely important to understand UK tax consequences before you invest and unfortunately, I do not know anything about UK taxation. Hence any of what I write has to be evaluated from tax perspective before going for those investments.
56% in equities. ($33600)
17 % in Indian equitites ($10200)
17 % in US equities ($10200)
22 % in global equities ($13200)
For Indian equities, I would select two options as follows:
A Nifty Index Mutual Fund ($7200) (Option to be selected ?Growth?)
A Midcap Mutual Fund ($3000) (Option to be selected ?Growth?)
For US equities, I would select Vanguard VTI or VTSMX with Dividends reinvested option
For Global equities, I would select
Vanguard VGTSX or EFA (this is an ETF) for $10,200)
Latin Markets ETF ILF for $1600
African Market ETF EZA for $1400.
For Future investments, you have indicated that you will save approximately $500 a month which is about $6000 a year. My recommendation would be to save about 60% of this in fixed income and 40% in equities. The 40% investment in equities will be in Indian equities.
The above will result in increasing your fixed income portion every year increasing from the current 44% suggested. As you get closer and closer to retirement, you want to bring the quity portion down to your comfort level in retirement and this could range from 0% to 50%. Depending upon asset base, risk tolerance, each individual makes this decision. Even in low tolerance retirement situation, I suggest up to 20% in equities, else somewhat higher. As you get closer to retirement, your AAP ratios need to get more conservative.
In addition to above, your Indian equity percentages will keep growing as your new equity monies (annual savings) will be going in Indian equities.
Any time, your portfolio is out of whack from the desired AAP percentages, it is probably desirable to readust by altering the new investment ratios to get to desired targets soon, rather then by selling etc. Selling and rebalancing portfolios may have tax consequences which will have to be looked into anytime you engage in such. If the portfolio is significantly out of whack, then rebalancing by selling should be considered.
I have to reemphasize the above suggestions are totally oblivous to tax law and tax law must absolutely be considered to see tax ramifications. In addition legalities should also be looked into as to UK law on foreign investments. So you should look into the tax ramifications before embarking on any investments. Hopefully someone in the forum will comment.
Hopefully this has given you enough pointers.
A Layman Needs Advice
desi
thanks for your advice, I shall do some study on the UK tax implications & also wait for other members to shed some light on the it .
regards
thanks for your advice, I shall do some study on the UK tax implications & also wait for other members to shed some light on the it .
regards
-
HAKUNAMATATA
- Posts: 403
- Joined: Sat Mar 03, 2007 4:09 am
A Layman Needs Advice
mints;26440Hi ,
I have been a silent observer of you various threads & appreciate the knowledge you guys posses in the Investment sector.
May be you gurus can push start me into my long journey into the investment world.
I am 37 yr old British citizen with an OCI & am planning to return to India in a few months (Oct 2007 ) , have a net worth of around $2,15,000 , of which I have already invested around $1,00,000 in the India real estate. The plans with the rest of the money is to build a house & invest some amount in stock/ bonds on regular basis......whether it's in UK, USA or India.
The thought of investing in the stocks has been with me for over a decade , but never had the luxury of finances to play with , but now I feel that I must make a foothold before it's too late. Reading others feedback I realise that it might not be a good time to enter the game , but then I also realise not being invested would even be a greater mistake, & I feel that, if one stays invested for a longhaul then it should'nt really make much of a difference .
Ideally I would like to invest in companies or Funds with a long term return but at the same time wouldn't want to miss out on the short term gains the market has to offer,either.... maybe you can suggest me mix of spread & few companies like Fidelity in US, any in UK as well.
By now you may have realised, that how little knowledge I have on this subject , that I can't even ask a correct question..... but maybe with a few knowledgeable people like you around , it shouldn't take me very long to learn to swim ...
Disclaimer & A pledge :-10 % of all the gains would go the worthy causes in my Motherland (India) . I alone would hold myself responsible for any decision I make . You are simply sharing your wisdom .
Thanks for the read .
Regards
Mints[/quote]
Hello mints,
This is an interesting topic and very close to my situation at present in life.
U also need to clarify the figures that you mention that they are not in millions as you have put the comma either in the wrong place or you have missed out on a zero. Secondly, the most important thing is you live in London and your figures are in Dollars thats totally confusing. As you mentioned you are a BC(British citizen) ,have you converted your cash to dollars or you are assuming a majority having USA exposure on this forum would throw better light on your scenario and its for their convienience??
Anyways, lets assume your cash is still in the UK and the second assumption it adds upto $215,000(215k) dollars and not $2.15million, cause if its the later you don't need suggestions. We will also assume the figure of £1=$2appx(1.9773), give and take , we will assume your total cash @£110,000 or 110k pounds.$100k invested in India that is out of the picture for now.
I think its a little too late for NOW to get into stocks and a good time to have entered was when the FTSE was 3500 at that time you could have bought any stock in the top 100 or 250 company(sensibly ofcourse) and you would have more than doubled your portfolio. Today the market is at 6600+ at an all time record and, the way from here COULD BE up...but its holding on its last breath is everyones suggestion and from here its going to be down or a correction to levels of 5500 or maybe 6000, but still high for someone entering afresh, unless you really play the game well, at the moment people making money on stocks are those on merger speculations (one BIG fish eating the SMALL one).eg corus which was taken over by TATA steel or barclays bank and rbs and the other 2 banks trying to buy abn amro(dutch bank) etc.. I am trying to explain this as simple as i can.
If you are trying to invest in the Indian stock market then its a run away train from kashmir to kanyakumari and only people hopping on and off it make money on the short term(with alot of experience) or people who have held on a long term.
I will break this thread into 3 parts 1)the analysis of your situation which i have done and basic explanation of the current market position.
2)how I taught myself to invest on the stock market with simple breakdowns and what to watch when investing and the purpose of invest ment .
3)Finally, how you could retire or live in India on what you have or go about generating an income.
-
HAKUNAMATATA
- Posts: 403
- Joined: Sat Mar 03, 2007 4:09 am
A Layman Needs Advice
On my 2nd part, I must also stress i was terrified on Investing on something where i had no direct control of in its price fluctuation, to me that was never going to be(STOCK MARKET). Cause, when i came to the UK i ran my own business, i had full control of prices, then went into properties , again full control of rentals and if i wanted to sell,and then with saturation in the property market i had to find something new which i could do sitting in my garden WHILE the rent was rolling in, and saw many ads which said make 10k sitting at home etc etc...all rubbish, nothing comes for free or ease and many pyramid business theories and business study hours dedicated. Thankfully, didn't burn my fingers in any of em.
Then, i said to myself, i will enter the FTSE with £5000 pounds, if i lose no pain.
The way i was going to do it is i will buy online and split my holdings into a portfolio of 500 pounds each so ,initially i would buy 10 shares. The company i use charges me £7 a trade ,whether i buy or sell and its still the cheapest in the UK ,so, i think. Another thing to take into account is there is a stamp duty of 1/2% on non -aim shares(penny shares or small floating companies).
I watched 2 things and bought solid shares no speculations. Do my homework on what the company sold what was their future. I watched P/E, WHICH IS A RATIO OF price of a share/earnings of the share, and i made sure it was as close to 10 as possible and watched that yearly the earnings of the company grew and that in return would reflect on the price. The lower this ratio the better the growth potential, and hence growth for the investor. The second one was YIELD, considering when i entered the interest in local banks was 4.5% gross and remembber in you reside in the UK there is a 20% tax deducted at source.
So, i bought most of the banks as they were ones with the lowest p/e and the best yield(over 5%) and i never went wrong. It was about allocation 500 pounds /share which i eventually increased to 2000 today, with more or less the same principle. But, like i mentioned the market is at its peak, there aren't many bargains to be had and very hard to find GOOD companies with lower P/E ratios and high yields of above 5 % . Cause today if you keep your money in a UK bank you would earn 4.8%+ net(6%+gross) ,ofcourse you don't get capital appreciation in a Bank like in a stock market or property market, thats the downside of keeping in a bank ,plus there is the inflation factor which eats the value of your money every year in a bank, but money is safe!!
Having, your investments spread over different sectors of the market,eg myself i have 23 different types of shares in the portfolio with various exposure,eg oil, mining,property,soft drinks,banking,utilities and with limited funding of 2k initially,you spread the risks too. The total fund value is up over 2 years @44%, but thats partly becuase of such a good run the markets have had over these years and a solid principle. There are hundreds of theories on the stocks and hundreds of views ,BUT this is the most basic and trust me it works over a period of time, provided you enter early when the markets are fairly low and hold them for a while, to pile on the capital appreciation and dividends.
If i was in your situation now i would wait and see before investing in the markets, maybe i am wrong, but this has been the trend over what history is available to us, what goes up must.......There was a similar situation is 1989, which makes a good case study, 1)markets were all time high ,as they are today 2)there was a roaring eastern tiger, then it was JAPAN today China,not to mention India 3)the markets were going up on mergers and speculations...as they are today. I must also say alot has advanced from those days, world economies are much stronger, and the world has become a small place today, back then Germany, France etc were individual powers today they are a combination. Today , there are two huge giants I dare say with half the worlds population in India and China roaring to becoming super economic powers, so, it's anyones guess. I prefer learning from history as i have a young family i don't have the courage to risk that little bit EXTRA!!
I would if i didn't have responsibilities of my lil kids. Don't want to give them the story, one time my portfolio was this much....sigh,wish i had sold then...etc etc.
Hope this is helpful. In my few years i have taught what lil i know myself by reading newpapers and magazines (never read a book) and i still consider myself to be a total novice. If you read my other post i give alot of the credit to LUCK. If you have the patience and the ability maybe you could follow the theories and teach yourself and maybe get better returns from this what we call ''the stock market'', but try keeping it simple, that has been my secret so far:emwink: ,ALL THE BEST!
Then, i said to myself, i will enter the FTSE with £5000 pounds, if i lose no pain.
The way i was going to do it is i will buy online and split my holdings into a portfolio of 500 pounds each so ,initially i would buy 10 shares. The company i use charges me £7 a trade ,whether i buy or sell and its still the cheapest in the UK ,so, i think. Another thing to take into account is there is a stamp duty of 1/2% on non -aim shares(penny shares or small floating companies).
I watched 2 things and bought solid shares no speculations. Do my homework on what the company sold what was their future. I watched P/E, WHICH IS A RATIO OF price of a share/earnings of the share, and i made sure it was as close to 10 as possible and watched that yearly the earnings of the company grew and that in return would reflect on the price. The lower this ratio the better the growth potential, and hence growth for the investor. The second one was YIELD, considering when i entered the interest in local banks was 4.5% gross and remembber in you reside in the UK there is a 20% tax deducted at source.
So, i bought most of the banks as they were ones with the lowest p/e and the best yield(over 5%) and i never went wrong. It was about allocation 500 pounds /share which i eventually increased to 2000 today, with more or less the same principle. But, like i mentioned the market is at its peak, there aren't many bargains to be had and very hard to find GOOD companies with lower P/E ratios and high yields of above 5 % . Cause today if you keep your money in a UK bank you would earn 4.8%+ net(6%+gross) ,ofcourse you don't get capital appreciation in a Bank like in a stock market or property market, thats the downside of keeping in a bank ,plus there is the inflation factor which eats the value of your money every year in a bank, but money is safe!!
Having, your investments spread over different sectors of the market,eg myself i have 23 different types of shares in the portfolio with various exposure,eg oil, mining,property,soft drinks,banking,utilities and with limited funding of 2k initially,you spread the risks too. The total fund value is up over 2 years @44%, but thats partly becuase of such a good run the markets have had over these years and a solid principle. There are hundreds of theories on the stocks and hundreds of views ,BUT this is the most basic and trust me it works over a period of time, provided you enter early when the markets are fairly low and hold them for a while, to pile on the capital appreciation and dividends.
If i was in your situation now i would wait and see before investing in the markets, maybe i am wrong, but this has been the trend over what history is available to us, what goes up must.......There was a similar situation is 1989, which makes a good case study, 1)markets were all time high ,as they are today 2)there was a roaring eastern tiger, then it was JAPAN today China,not to mention India 3)the markets were going up on mergers and speculations...as they are today. I must also say alot has advanced from those days, world economies are much stronger, and the world has become a small place today, back then Germany, France etc were individual powers today they are a combination. Today , there are two huge giants I dare say with half the worlds population in India and China roaring to becoming super economic powers, so, it's anyones guess. I prefer learning from history as i have a young family i don't have the courage to risk that little bit EXTRA!!
I would if i didn't have responsibilities of my lil kids. Don't want to give them the story, one time my portfolio was this much....sigh,wish i had sold then...etc etc.
Hope this is helpful. In my few years i have taught what lil i know myself by reading newpapers and magazines (never read a book) and i still consider myself to be a total novice. If you read my other post i give alot of the credit to LUCK. If you have the patience and the ability maybe you could follow the theories and teach yourself and maybe get better returns from this what we call ''the stock market'', but try keeping it simple, that has been my secret so far:emwink: ,ALL THE BEST!
-
HAKUNAMATATA
- Posts: 403
- Joined: Sat Mar 03, 2007 4:09 am
A Layman Needs Advice
In my final part ...if you are still awake and reading this....:rolleyes:
How to live on about £100k.
Well, very tough i must say...but you have major factors on your side so lets see how we can keep this short(luckily for those reading i am tired too) and to your use.
1)You are a BC(BRITISH CITIZEN) so you will not be taxed on your world wide income and whatever interest you generate can be from an offshore bank and thats @gross, so if your money is still in UK, you can deposit in a bank wwhich pays interest monthly eg bank of scotland international paying 5.95% invested for a year or 5.99% yearly on investments tied for 2-3 years. Interest can be transfered to bank of your choice on a monthly basis. If you opt for yearly interest ,the top rate is 6.25% on sterling.
2)You have $100k invested in a property to live in India I assume so you will not have any rent to pay, if its land ,that too can be easily financed as just building cost would be low. OR just sale the land and buy a nice big flat...
3) your appx £110k will generate an income of (£6589 per year @ 5.99% ) £549 /month tax free
Considering, the rupee is showing signs of strengthening is one of the factors against your retirement.
But for now £550=44,000rupee@80rs=1£.......you don't need to worry for a thing. You can live like a king!!!
IN SHORT YOU DON'T NEED STOCK MARKET,INDIAN REAL ESTATE ETC ETC....YOU NEED A NICE GARDEN OR A TERRACE AND ALL THE TRIMMINGS THAT COME WITH IT!!(wish i could have said this before typing all that, but hope it was USEFUL, if not inspirational:emsmilep: )
How to live on about £100k.
Well, very tough i must say...but you have major factors on your side so lets see how we can keep this short(luckily for those reading i am tired too) and to your use.
1)You are a BC(BRITISH CITIZEN) so you will not be taxed on your world wide income and whatever interest you generate can be from an offshore bank and thats @gross, so if your money is still in UK, you can deposit in a bank wwhich pays interest monthly eg bank of scotland international paying 5.95% invested for a year or 5.99% yearly on investments tied for 2-3 years. Interest can be transfered to bank of your choice on a monthly basis. If you opt for yearly interest ,the top rate is 6.25% on sterling.
2)You have $100k invested in a property to live in India I assume so you will not have any rent to pay, if its land ,that too can be easily financed as just building cost would be low. OR just sale the land and buy a nice big flat...
3) your appx £110k will generate an income of (£6589 per year @ 5.99% ) £549 /month tax free
Considering, the rupee is showing signs of strengthening is one of the factors against your retirement.
But for now £550=44,000rupee@80rs=1£.......you don't need to worry for a thing. You can live like a king!!!
IN SHORT YOU DON'T NEED STOCK MARKET,INDIAN REAL ESTATE ETC ETC....YOU NEED A NICE GARDEN OR A TERRACE AND ALL THE TRIMMINGS THAT COME WITH IT!!(wish i could have said this before typing all that, but hope it was USEFUL, if not inspirational:emsmilep: )
A Layman Needs Advice
Hakunamatata:
Thx for sharing u r knwoledge.
Abt #8
<<
1)You are a BC(BRITISH CITIZEN) so you will not be taxed on your world wide income.
>>
I am not an expert in Taxation but I think it doesn't matter whether u r a BC or not, taxation is based on u r residence.
If u r UK resident for taxation purpose for a particular Tax year then you will be taxed on u r global income, isn't it.
Few days back I had read an article in BBC(finance) that one might get a communication from Inland Revenue if he/she holds overseas accounts(Indian accounts in our case) and received any interest in India during their stay in UK.
Info about these bank accounts/transactions they may get from money transfers which we do from our UK banks.
If possible can u please share any documents/URL from Inland Revenue so that I can have more clarity about this(I am pretty sure there are many others who would like to know this).
Also whats ur take on investments made by a resident BC in India.
Say I invest 10K GBP in next few days in Indian mutual funds(growth option)
and don't redeem them for say next 5 yrs.
After 1-2 yrs from now, I R2I and then redeem my investments after 5 yrs from now(or 3 yrs after I R2I).
During this time my investments have grown say 10% every year.
In u r opinion how will Inland Revnue treat this investment?
Will it be taxable in UK?
I think there are some TAX related complications for US citizens (and US residents) if they decide to invest in mutual funds in India thats why I have raised this query to know how Inland Revenue treats overseas investements by resident BCs.
Thx in advance,
Fantoosh
Thx for sharing u r knwoledge.
Abt #8
<<
1)You are a BC(BRITISH CITIZEN) so you will not be taxed on your world wide income.
>>
I am not an expert in Taxation but I think it doesn't matter whether u r a BC or not, taxation is based on u r residence.
If u r UK resident for taxation purpose for a particular Tax year then you will be taxed on u r global income, isn't it.
Few days back I had read an article in BBC(finance) that one might get a communication from Inland Revenue if he/she holds overseas accounts(Indian accounts in our case) and received any interest in India during their stay in UK.
Info about these bank accounts/transactions they may get from money transfers which we do from our UK banks.
If possible can u please share any documents/URL from Inland Revenue so that I can have more clarity about this(I am pretty sure there are many others who would like to know this).
Also whats ur take on investments made by a resident BC in India.
Say I invest 10K GBP in next few days in Indian mutual funds(growth option)
and don't redeem them for say next 5 yrs.
After 1-2 yrs from now, I R2I and then redeem my investments after 5 yrs from now(or 3 yrs after I R2I).
During this time my investments have grown say 10% every year.
In u r opinion how will Inland Revnue treat this investment?
Will it be taxable in UK?
I think there are some TAX related complications for US citizens (and US residents) if they decide to invest in mutual funds in India thats why I have raised this query to know how Inland Revenue treats overseas investements by resident BCs.
Thx in advance,
Fantoosh
A Layman Needs Advice
<<
1)You are a BC(BRITISH CITIZEN) so you will not be taxed on your world wide income.
>>
Did some research on hmrc website
http://www.hmrc.gov.uk/pdfs/ir20.htm#part1
As far as I could understood if you are UK resident you have to declare your global income on your self assessment return
But if you are UK resident but non-domiciled which I believe most of us are then you will pay tax only if you bring your global income into the UK .
anyway I will doble confirm with my accountant and post it here
1)You are a BC(BRITISH CITIZEN) so you will not be taxed on your world wide income.
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Did some research on hmrc website
http://www.hmrc.gov.uk/pdfs/ir20.htm#part1
As far as I could understood if you are UK resident you have to declare your global income on your self assessment return
But if you are UK resident but non-domiciled which I believe most of us are then you will pay tax only if you bring your global income into the UK .
anyway I will doble confirm with my accountant and post it here