Our consumer advocate takes readers' questions on ethical investment vehicles, tax on interest payments from UK savings accounts for nonresidents, and what happens to annual leave in case of redundancy.
On Your Side: the risks are higher for ethical investors
I am interested in investing a fairly significant amount of money, but I have certain principles in life that I want to maintain for my investments as well. I have spoken to an adviser at my bank who has recommended a number of plans, but these invest in funds that include companies that I want to avoid. When I asked about funds that do not invest in the defence sector I was told that they didn't have such [ethical] funds, besides which they had never been popular and did not perform anyway. I have to doubt the accuracy of this information as I have read articles about them, but I would like to know if these options are available to me living in the UAE. VS, Abu Dhabi
Ethical or socially responsible investment funds have been available for more than 25 years and this is a growing investment sector. Such funds usually screen out companies that invest in areas such as armaments, tobacco or alcohol, and others seek out companies that make a positive contribution to the environment. Not all fund managers offer an ethical fund and many banks are linked to a single insurance company with limited investment options.
There are, however, several investment platforms available to you as an expatriate that will give you the facility to invest in accordance with your principles. Because of the restrictions on what stocks are chosen, ethical funds can be higher risk and more volatile, but that does not mean that some cannot make an appropriate investment. You should speak to an independent financial adviser who is familiar with this type of investment.
I have recently moved to Abu Dhabi, but have a number of savings accounts in England that I plan to keep. There is quite a lot in the accounts and I receive regular interest payments that cover a number of outgoings. As I do not have to pay UK income tax now, can I claim back the tax being deducted from my interest payments? If so, how do I do this? RT, Abu Dhabi
Assuming you remain outside of the UK for at least a full tax year and are considered non-resident for tax purposes, you may apply to receive interest paid gross. You can apply to receive future interest without deduction of tax by providing your bank with a "not ordinarily resident declaration" on a R85 form from HMRC (Her Majesty's Revenue and Customs). This can be downloaded from the HMRC website www.hmrc.gov.uk and one form must be completed in respect of each account and sent to the relevant deposit taker. You should note, however, that not all banks choose to offer the facility of gross interest to non-residents, so please check first.
If you have already had tax deducted, but are not liable to pay it, you can make a request for a refund, although you may have to wait awhile in order to satisfy the taxman that you are non-resident. You have several years to make a claim. If the total savings interest exceeds £8,105 (Dh46,740) in the current tax year, any payments above this personal allowance level will remain subject to tax as it is classed as income arising in the United Kingdom and as such is liable to UK tax, even for non-residents.
I have just found out that I am to be made redundant and my boss has given me a letter with 30 days' notice of ending service, which I think is normal. I have taken very little of my annual leave this year as I was saving it up and my boss has suggested that this should be part of the notice period. My plans have now changed and I would prefer to work for the next few weeks and be paid for the extra days that will be owed to me. I would like to know if I have to take the annual leave or if I can choose to be paid instead. JH, Dubai
If an employment contract requires 30 days' notice, then any days of annual leave accrued are separate to this. While an employer can usually determine when leave is taken, in this situation an employee cannot be forced to take it during a notice period. An employee is legally entitled to a certain number of days off a year and if days have accrued and are not taken at the time service ends, the individual should be paid in lieu along with the final salary payment. If an employer does not want employees to work their notice period, then they are still entitled to receive full pay, plus days of annual leave accrued.