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Whilst http://www.interest-rates.org.uk concentrates on helping you 
find the best savings interest rate available to you,  we will 
sometimes ask an expert for an alternative view. Today Peter Randall, 
based in Brussels, has kindly agreed to share his considerable experience.


Whereas saving is about the accumulation of money for future use, and 
the avoidance of waste, investment is choosing where to put that money 
in the meantime to achieve the best return.

Keeping your money as cash is thus an investment decision just as much 
as buying a portfolio of shares.

Is keeping cash the best way for you? 
Is keeping cash without any risk? 
What are the issues you should be thinking about?


Should you be keeping your money in the currency:

*    you received or earned it
*    where you now live
*    of the country you came from originally
*    that matches your tax bills, or other liabilities
*    that earns the highest interest rate?

An all-eggs-in-one-basket strategy may not be best.  The US$ fell 
nearly 30% against the Euro in the past four years, and the Russian 
Rouble crashed by 99.5% against the US$ over the 10 years to 1998! 

It pays to diversify.


Wherever your money is, it is increasingly likely that someone wants to 
tax it: 

*  where it is held (see the European Savings Directive)
*  where you are resident
*  where you are tax resident
*  where you send it for future use (perhaps your home country).

Tax avoidance by non-disclosure is clearly illegal and will soon be 
virtually impossible.

Holding cash directly may not be the most tax-efficient way.



Eats away at the spending power of your money (3% inflation over 
10 years means your money will have lost a third of its value).  

Does the interest you receive on your cash, after tax, even keep 
up with this? 


When will you need the money back?  If in two, three or more years 
time, perhaps it is worth looking at alternative ways to invest? 

By now you may feel it would be a good idea to explore some alternative 

Peter has many years experience of international savings and 
investments, and would be happy to explore some of the options 
open to you.

For more information about Peter, or to contact him please follow this 

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* What you want from these newsletters?
* The European Savings Directive.  COMING NOW



For future newsletters we would much appreciate your ideas for topics that you 
want to know more about, that would help or interest you.  Please share your 
thoughts with us at ivaplace@yahoo.co.uk



Have you done anything yet about the Directive that comes into force from 1 July?  
This may affect your savings held in accounts not only in EU countries but also in 
many established tax havens.  

Some countries are offering you the choice to opt for either:

  *  Deduction of tax at 15% from interest due to you.  In this case 
     information will not be passed to the tax authorities in your 
     country of residence. Tax deducted will increase over time. 

  *  Information about your savings being passed to the tax authorities 
     in your country of residence. In this case tax will not be deducted 
     at source.

Other countries may be making the choice for you.  

Where you have the choice, you should by now have received forms from your savings 
institutions.  If you do not complete and return such a form by 1 July your bank will 
probably, by default, deduct tax.

The information required of you, if you opt for ‘exchange of information’, is not 
onerous, but does appear to vary.

If you are EU resident, this may include:

* Account Number with the Bank or Building Society. 
* Confirmation of your address. 
* Yours signature to a declaration that you are willing for information 
  to be passed to the tax authorities in your country of residence.
* Your Tax Identification Number (TIN) where this exists. 
WARNING!  You may still get caught up in the process even if you are not EU resident.  

Different jurisdictions seem to be requiring different information from 
such non-EU residents

 * A tax residence certificate from your country of residence 
 * A statement from your financial adviser 
 * A copy of a recent tax return 


Some banks are allowing you to postpone your receipt of interest 
payments until a more tax effective time; this may be useful if 
you are planning a move to a lower taxed country.

You may also be able to get a tax exemption certificate or some other 
documentation to prove that you are not liable to tax in your country of 


Please do share your experiences and problems of the European Savings Directive, with thousands 
of other savers –  by sending your email to ivaplace@yahoo.co.uk.  – please let us know if you 
don't want your name published.

Don’t forget that more information on the Savings Directive is 
available on the website at