Right, decision made...

[Ian_and_Sian]

...we're joining the ex-pat throngs and taking the holiday out of 'holiday home'!

After five years of owning our apartment on the Lapis complex, we're finally doing what we've talked about for years - semi-retirement in Turkey - well for Sian, at least,  being an actress, writer and film produce does mean she can carry on working to a certain degree providing the internet link stays up!

We anticipate making the move in September 2020, bringing the proceeds of our house sale with us to live on with the help of the generous Turkish interest rates.

So, please expect lots of questions this coming year from us and I hope you think some of them are not too daft.

To kick off, the questions, what is the tax on interest for a timed deposit account? I have read it's 20% but also have read that this was reduced last year but can't tell if that was a temporary reduction.

I estimate bringing over about £100K, converting it into Lira and putting it in a 32 day account (31 to 32 days seems to be the cut off for an extra percentage point interest, at least with Akbank). From what I can see, even with a 20% tax rate, the interest should be more than enough to live on?

We'll not be cutting UK ties completely,  part of what we are planning is to buy a holiday home (static caravan style) on a holiday park not too far from us now. It will give us a bolthole to return to when back in the UK as well as giving another income through rentals while we're over there. Anyone experienced in that sort of set up?

We've not got too involved with conversations in this forum, just chipping in here and there but, we do regularly read the things going on and the advice people have to share

So, looking forward to joining the ex-pat community and becoming a lot more frequent poster on the forum...

... and hopefully meeting some of you when we're next there in September!

[Highlander]

Wishing you every happiness in your new life when it happens.  

[Scunner]

All the best guys, follow your dreams  

Plenty of CBF members have moved out (we are back in the UK 9 years now) so plenty of experience on here. Please ask away.

I'll leave the savings/interest question for others, what with us being out of it for 9 years my knowledge is dated   

[Liz 101]

At the mom the tax rate on interest is 15%

[MrT]

We are also planning moving over in 2020 ( 55 in may so can get to my pension )

Not sure what to do with the house here in the UK. Sell it, rent it, or sell and buy a small terraced house to rent. Your Idea of a static home is interesting.



 

[Scunner]

One thing you will need to bear in mind when living off the interest from a tidy lump sum. With the ever weakening lira your base sum (in sterling) will be diminishing, and over time if previous trends are followed, quite alarmingly.

If you'd deposited £100k into lira at a Turkish bank ten years ago exactly, it would be worth around £30.5k in sterling terms today if you converted back.

Of course there are other factors to consider - inflation being rife, the sum total of your interest payments on your investment (at healthy percentage rates) which all makes for a mathematical calculation well beyond me. However, the general feeling is that you will be significantly worse off in money terms.

Some expats dismiss the value of their banked TL against the pound as they live, think and spend only in lira these days. That might be the case, as long as they never have to convert and return to the UK, or (God forbid) bequeath it to UK based relatives/friends who will want to convert it back to sterling.

[MrT]

Been looking at the pound value against the Lira interest rate

100k at 2.2 lira to the £ 10 years ago, converted back at 7.8 lira to the £ now I make it 28K ( no interest added ) the value of the lira against  pound value of the 100k has dropped 15% year on year to show that loss

Therefore if the interest rates are worth more than 15% net it could be worth putting cash into the lira but the gain will only be the difference if above 15%

so if you get 20% interest rates on a lira account you will get 17% after tax on the interest so the net gain would be 2% better



 

[Scunner]

Not a bad start at the mega sum  

Ok so there are plenty of issues with that sum so, first spanner in the works - you didn't include inflation (currently 19.71% pa at End March 2019).

[MrT]

Just worked from XE rates   2.2 ten years ago to 7.8 today  which averages on a 15% increase annually over the 10 years. obviously some years are better some are worse

This last year was terrible for the lira 5.6 to 7.8 lira to the pound, an increase of 39% surprised inflation is as low as 19%
If you had put your 100K into lira a year ago and took it out today it would only be worth 72K ( again  no interest accounted for ) if you accounted for getting a nett 17% interest by having it in a turkish account yielding 20% interest you would still only have 84K back in sterling 16K down the drain.

I would keep my cash mostly in my UK account, the Marcus account isn't bad for large sums of cash without tying it up although that only gives 1.5% interest.

[TOSH TOSH]

Good luck to you both, sure you will be very happy living in beautiful Calis, we are also moving over there in the very near future, we have owned a villa for 7 years, sold it and bought a bigger better one with a huge garden with every fruit tree in !! just returned after 5 weeks out there... roll on June when we go back, we will look out for you. xx