If you live outside of the UK, make sure your local laws allow you to own Premium Bonds. Because of the tight gaming and lottery legislation in the United States, it may not be possible or practical to hold Premium Bonds there.
If you are allowed to keep them, you must first apply in writing. After you’ve set up your holding, you may sign up for our online and phone services.
Is it possible to purchase Premium Bonds for grandchildren who live in Australia?
Premium Bonds for children under the age of 16 can be purchased by anyone. It’s acceptable if the youngster already has some Premium Bonds; they can hold up to £50,000 worth.
If you are not the child’s parent or guardian, you must notify them before purchasing Premium Bonds, since we will contact them directly for things like giving proof of identity and address.
- Please double-check that the parent/guardian is willing to take after the child’s investment and that you have their permission to give us their information.
- We’ll verify everyone on your application’s identity and address, and we may need to request documentation to prove it.
- Please inform the parent/guardian that we may contact them to request proof of identity documentation.
We’ve put up a quick guide on how to top up a child’s funds, whether you’re a parent, grandparent, or family friend:
If you live in Spain, can you buy Premium Bonds?
When you move to Spain, you can keep your Premium Bonds, but they will no longer be tax-free, and all of your winnings will be subject to taxation. Residents of Spain, on the other hand, have access to tax-efficient investment instruments that can lower taxable income and hence income taxes.
If you live in Australia, can you buy Premium Bonds?
Yes, if you live in Australia, you can buy more Premium Bonds. We can send the rewards to either address, but please keep in mind that they are only valid for three months and must be signed before being put into the bank.
Is it possible to have a UK savings account while living abroad?
If you open an Individual Savings Account (ISA) in the UK and then relocate abroad, you won’t be able to deposit funds into it until the following tax year (unless you’re a Crown employee working abroad or their spouse or civil partner). As soon as you cease to be a UK resident, you must notify your ISA provider.
Is it possible for a parent to cash in a child’s Premium Bonds?
Buying NS&I Premium Bonds for a youngster is a fantastic idea because it’s a gift that keeps on giving (possibly).
Premium Bonds can be purchased on behalf of a kid by anybody over the age of 16, thus aunts, uncles, and even family acquaintances can participate.
Furthermore, NS&I’s decision in 2019 to reduce the minimum investment amount from £100 to £25 makes them a considerably more practical, or inexpensive, gift.
Instead, how about purchasing bonds for yourself? The following are the simplest methods for purchasing Premium Bonds.
How to buy Premium Bonds for your child
Parents and legal guardians can apply online, over the phone, or by mail to purchase Premium Bonds as a gift for their children.
Whether you’re buying for the first time or adding to your collection of Premium Bonds, you’ll need to be registered with NS&I.
As previously stated, you must invest at least £25 in Premium Bonds, with each £1 producing one unique bond number.
Every number has an equal chance of winning a prize, so buying more increases your chances of winning.
Until your child turns 16, you will receive confirmation of transactions, money for bonds cashed in, and rewards won.
Do you want to know whether you’ve won anything? The most recent results can be seen in this article.
Buying Premium Bonds for someone else’s child
If you want to spoil your grandchild, niece, nephew, or even a family friend’s child, you can apply online or by mail for an electronic or paper gift card to give to the child.
Your investment will be acknowledged, but only the chosen parent or guardian will be able to manage and cash in the bonds.
Before purchasing Premium Bonds for someone else’s child, there are a few things to consider.
Of course, you’ll want to make sure the parent or guardian is okay with you sending over their information and that they’re happy to look after the bonds.
These facts include the child’s and parent’s or guardian’s dates of birth and addresses, as well as the child’s Premium Bonds holder’s number (if they have one).
Everyone on the application will have their identity and address checked by NS&I, therefore there’s a risk that documentation will be required.
To avoid any unpleasant shocks, inform the parent or guardian that NS&I may contact them to request documentation to establish their identity.
Premium Bonds are detailed in detail, including how to purchase them, how to cash them in, when winners are revealed, and more.
How long does the process take?
If you’re buying the bonds as a present for someone special, you’ll need to prepare ahead and apply ahead of time.
NS&I hopes to open new accounts in seven to ten working days, but because everyone’s name and address on the application form must be validated, it will most likely take longer.
What happens if the child wins?
If the child outperforms the odds and wins a prize, the parent or guardian will have to decide what to do with it.
There’s no need to be concerned about tax implications. While a child cannot earn more than £100 in interest per year from savings, this does not apply to Premium Bonds winnings because they are rewards.
Finally, make sure the child’s information is up to date: there are millions of pounds in unclaimed awards held by bondholders under the age of 16.
Is it possible to cash in my child’s Premium Bonds?
Not a member yet? You don’t need to create an online profile to withdraw money from your or your child’s Premium Bonds. All you have to do is complete a little online form. Make sure you have access to your account information.
Please note that in order to withdraw or close the account, you must be the person responsible for the child’s Premium Bonds.
You can withdraw money from Premium Bonds while ensuring that particular Bonds remain in the draw by filling out a form online.
A cashing in form can also be downloaded, printed, and completed. Then send us your completed form along with the Bond certificates that need to be cashed in (if you have them).
How can I invest while residing in another country?
Lauren Miller is a company owner from the United States who writes on personal finance, career development, and retirement planning.
Living abroad is sure to be one of the most memorable and exciting experiences of your life but don’t expect the same level of excitement if you’re considering investing while living abroad. In fact, since the implementation of the Foreign Account Tax Compliance Act (FATCA) in 2010, it has been more difficult for Americans residing overseas to invest in the United States or elsewhere.
Fortunately, it’s not impossible; all you have to do is educate yourself before diving in.
Consider Repatriation
Before deciding on an investment strategy, think about your long-term living objectives. Your investing approach will be very different if you plan to live and work in a foreign nation for a few years before returning to the United States, than if you plan to retire overseas.
The most important factor to consider is how to handle currency risk. Currency risk refers to the possibility of losing money on an investment due to fluctuations in the exchange rate. The wisest course of action is to invest largely in the currency you want to spend the cash against. If you expect to retire in Europe, invest in Euro-based stocks, bonds, and mutual funds. If you expect to retire in the United States, invest in dollar-denominated equities, bonds, and mutual funds.
Seek an Expat-Friendly Broker
One of the goals of the 2010 Foreign Account Tax Compliance Act was for the IRS to be more aggressive in enforcing US regulations on foreign investment taxation and reporting. As a result, a growing number of foreign institutions are refusing to allow Americans to create abroad investment accounts, and many U.S. brokerages are refusing to engage with expats as well.
But everything is not lost. Simply do your research and look for a U.S.-based broker who is familiar with expat investments and has experience working with Americans living abroad. Even if you want to retire in a different country and wish to make the majority of your investments in a different currency, putting them in the hands of an American investment business makes it easier to comply with complicated tax rules.
Research Taxes
Tax penalties are one of the key reasons you should continue to use an American-based investment firm to make your investments. FATCA, which is based on the Passive Foreign Investment Corporation (PFIC) guidelines, necessitates substantial recordkeeping and reporting when your interests are held offshore. All mutual funds, hedge funds, cash management products, and foreign pension plans domiciled in foreign countries are subject to these restrictions. PFIC investments are taxed at a substantially higher rate up to 35 percent than non-PFIC investments. This is a much more difficult pill to chew than the long-term capital gains tax rate.
The key is to comprehend what “housed” entails. You can invest in European equities and bonds either through a U.S. brokerage or through a European brokerage. The investments themselves may be equal, but those held in the United States through a U.S. brokerage would be taxed at a lower rate, whilst those held outside the United States would be taxed at a higher rate, depending on the total quantity of all your international investments.
Construct a Globally-Diversified Portfolio
Given the international economy, everyone, especially expats, should establish a globally diversified portfolio of investments. If you’re not sure where you want to put your money, engage with a broker to build a portfolio that includes different currencies. When it comes time to cash in your investments, this lowers your overall risk.
Invest in Property
Consider a property investment if you have the financial resources and the desire. If you intend to live in a foreign country forever, you can invest in international property without incurring the same tax penalties as investing in foreign equities. When it comes time to sell, the returns might be large depending on where you live. Just be wary of the regulations and conventions that govern property transactions in other countries. Enlist the help of a respected real estate agent preferably an American who lives in the foreign country and a lawyer.
If you expect to return to the United States in a few years, you might want to consider buying a property in the United States to rent out while you’re away. Real estate is a terrific long-term investment option as long as you have a dependable property manager who can handle the rental while you’re away.
Final Thoughts
If you’re planning to relocate to another country and already have a well-constructed investment portfolio, don’t assume you’ll be able to keep it intact while living as an expat. Check with your broker to see whether they are expat-friendly and aware with the laws and regulations that apply to Americans living abroad. The last thing you want is to get a call or an email telling you that your account is being closed because you neglected to notify the brokerage of your new address.
Is it legal for me to own Premium Bonds if I live in France?
The announcement that the prize money for UK Premium Bonds has been reduced serves as a timely reminder for British expats residing in France to examine their investments. Many UK nationals keep the same investments they had while living in the UK, however they are rarely fit for their current needs and are not tax efficient here.
Your investments and tax preparation should be tailored to your unique circumstances and goals.
When these factors shift, you’ll need to rethink your plans.
Moving to a new nation is a significant adjustment that necessitates a thorough evaluation of your money management to ensure that it is as efficient as feasible for your new life.
Premium Bonds will pay out nearly 14% less money each month from August 1st, after the prize pool was lowered by £7.8 million.
Simultaneously, the total number of prizes was reduced by 150,000, reducing your odds of winning.
Each month, a £1 million reward will be awarded, but the number of £100,000 payouts will be cut from five to three.
Similarly, instead of nine £50,000 rewards, there are now only six.
Lower down the prize scale, fewer prizes will be awarded.
The bonds are issued by the state-owned National Savings and Investments (NS&I), which stated that they had no alternative but to reduce the prize fund. Interest rates on NS&I’s Income Bonds, Direct Saver, and Direct ISA will be cut from September 12th, as announced in June.
This is just another setback for UK savers.
As a result of the government’s Funding for Lending scheme, private sector interest rates have declined in the last year. Many NS&I products soared to the top of “best buy” lists, and roughly £1.7 billion came into the institution, which was not healthy for it. It is now not compelled to raise funds for the government, and if its charges are excessively high, it will be accused of exploiting its position. It needed to intervene in order to balance the interests of savers, competitors, and the government.
Premium Bonds currently have an average yield of 1.3 percent, but you never know when or if you’ll earn anything, or what kind of return, if any, you’ll get on your investment.
Premium Bonds are one of the most popular investments in the UK, with 22 million people investing £46 billion.
One of the most appealing features is that they have always been tax-free.
So, even if you win the £1 million prize, you won’t have to pay any income tax on it if you live in the United Kingdom.
On the other side, unless you make a significant victory, your money is losing purchasing power each year due to inflationary impacts.
When you relocate to France, you can keep your Premium Bonds, but they will no longer be tax-free, and all of your earnings will be subject to taxation.
Individual Savings Accounts (ISAs) and Personal Equity Plans (PEPs) are also popular among British expatriates (PEPs).
For UK citizens, the money they generate is tax-free, however they are not tax-efficient investments for French residents.
In France, the income from cash ISAs, share ISAs, and PEPs is completely taxable.
In France, investment income is now taxed at rates of up to 45 percent as ordinary income. After that, you’ll have to pay another 15.5 percent in social charges.
If you win a large Premium Bond, you could be taxed up to 60.5 percent of your profits!
The earnings must be declared on your annual French tax return.
Given the great amount of information exchange between European countries these days, the local tax officials are sure to find out about it regardless.
You should also evaluate how your other UK investments, such as shares, unit trusts, OEICs, and investment bonds, are taxed in terms of both income and capital gains.
Are they the most tax-effective method to invest your money?
It’s really unlikely.
Residents of France, on the other hand, have access to tax-efficient investment instruments that can lower taxable income and hence income taxes.
With expert counsel, you may be able to get favorable tax treatment for your capital investment and other assets.
Tax rates, exemptions, and reliefs may change.
Any tax-related comments are based on our current knowledge of tax laws and procedures, which are subject to change.
Tax information has been condensed; individuals should seek individualized advice.
Is it safe to purchase Premium Bonds over the internet?
Premium Bonds have no danger to your capital, thus the money you put in is completely safe; the only risk is the ‘interest’. And because Premium Bonds are managed by NS&I, which is backed by the Treasury rather than a bank, this capital is as safe as it gets.
Can my Premium Bonds be stolen?
Maintaining the security of your account. We promise that your money is safe when you save with us online. We’ll compensate you in the uncommon event that money is fraudulently taken from your NS&I accounts or investments by someone else.