EX-Pats and Owners Abroad

Turkish Banking
9 Posts
If taxed at 20% then say £100 earned in interest would pay £20 in tax.
Don't forget that interest in the UK is taxed at source and so quite often you do not realise that you are paying it.
What you have to remember is that the interest rate is only high because the TL is not a strong currency and historically has had large falls on the world currency market.
I do not know anyone who would recommend this as a good investment.
Most Turks would rather keep their money in euros, sterling or dollars.
Sorry mibut ,tend to disagree. current trends are that the repo or interest account is declining as the YtL gets established. most Turkish smart money is now going into property. The banks are offering good rates to underpin the currency but gradually, with the IMF restrictions, the interest rates will come down. As a short term measure you can get good money on interest,you only have to keep it in for 1 month to get interest. But be mindful of currency changes. I suggest you have a sterling and YTL account and internet banking. As the interest goes down or the pound goes up the switch between accounts.
Tax is charged at 18% on a monthly account and 16% on a yearly. You are exempt from this tax in Turkey if you declare it in the UK as income.
Chelsea boy,
thats ok if you live in Turkey and keep an eye on everything,
this, I think, is supposed to be a holiday fund and not actively watched.
Thanks for the replies Mibut & Chelsea boy- As i said i dont want to get into pros/cons of turkish banking as everyone has there own opinion as to whether its good a idea or not

Read up on it a little more last night after i posted - I will confirm to her that the bank are correct about the interest charge and she then can make up her own mind

Again thanks guys :lol:
Your friend will need to declare this interest on her UK tax return whether Turkish tax is deducted from the interest or not. If tax is deducted then she will have to pay UK tax on the interest at a rate which is dependent upon whether she is liable to UK tax and if so, at what rate.

As she is not resident in Turkey the tax being deducted there will be classified as a non-repayable witholding tax in the UK, which is fine if she is a UK taxpayer but not fine if she does not pay income tax. This is because if the money is held in a UK bank by a UK resident non-taxpayer, they can register to have the interest paid gross, or claim a repayment of the tax deducted.
Huh??? Right so she does not pay tax in the UK as she took early-ish retirement? (she had a lump sum payment due to her husband dying from asbestos related lung cancer and is really living of this)

So what does she have to pay in the UK - Surely the UK Taxman wont know about her money so she will not have to pay tax?? Or are YOU the taxman ??lol
No I'm not the taxman :? I work as a tax consultant. Basically, if she can get the interest paid gross in Turkey and she is a non-taxpayer on her whole income in the UK, then there will be no further tax to pay.

If tax is deducted in Turkey and she remains a non-taxpayer in the UK, she will not be able to reclaim the foreign tax deducted.

Does that clear up the situation?

Many thanks - Clear as a bell now :D . Will pass on this info re the tax situ - And then it is up to her to decide on the investment!

Ta ta for now!!

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