Can British expat pay savings into ISA while living in UAE?

Keren Bobker advises a Brit in Abu Dhabi who has been paying £5,000 into an ISA in the UK for the past three years.

Keren Bobker advises an expat trying to save money in British pounds in the UK. AFP
Powered by automated translation

I am British and have been living in the UAE for three years. I have been paying into an ISA (individual savings account) in the UK all this time but someone has told me this not allowed for non-UK residents. I have been paying in about £5,000 (Dh25,949) each year. Are there any repercussions? Will I have to pay the tax on the interest I earned or will the bank take back the interest I have received? GC, Abu Dhabi

Provided the ISA was opened while you were still resident in the UK, you can keep the ISA open and still receive the tax relief on the money held in it, but no further contributions can be made once you have moved abroad. (The only exception is if someone is a Crown employee working overseas or their spouse). The onus is on the ISA account holder to notify the provider if their residence status changes. Any contributions made while resident outside of the UK are deemed void and invalid. I have checked this issue with HMRC (Her Majesty’s Revenue & Customs) and they have confirmed that the ISA provided must remove all invalid contributions from the account and return it to the investor together with any interest paid with tax deducted. The tax element must be paid to HMRC by the provider, although a non-UK resident may be able to reclaim the tax using HMRC form R43. If any ISA provider finds that an account holder has been incorrectly making contributions they will follow this course of action.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only