View Full Version : Shoddy treatment by offshore banks

31st Aug 2013, 14:16
Offshore banks closing accounts. There was a thread on this recently but it was locked.

Today's Telegraph contains a similar story - aviation content :
Banks 'dump' thousands of loyal customers - Telegraph (http://www.telegraph.co.uk/finance/personalfinance/savings/10273512/Banks-dump-thousands-of-loyal-customers.html#disqus_thread)

..................Mr Streeter moved his NatWest account from England to a NatWest International branch in Jersey ...........This suited his work as a helicopter pilot, first in the Royal Marines and later as a commercial pilot for companies in Malta, China, Nigeria, the Ivory Coast and Abu Dhabi.

The same has happened to several people I know.

Grenville Fortescue
31st Aug 2013, 15:20
The entire offshore banking scene is going through a transformation as a result of most territories having signed-up to various treaties of disclosure.

With the exception of exceptionally large accounts, most of the big banks simply aren't interested in hosting private accounts anymore, too much hasstle.

Beyond facilitating non-UK receipts offshore banking (in terms of privacy) is becoming scarce - in fact there are only a handful of territories where one's financial assets can now be assured of privacy and even those are under threat of exposure as part of the 'global' agenda.

Gertrude the Wombat
31st Aug 2013, 15:23
Mr Streeter moved his NatWest account from England to a NatWest International branch in Jersey for tax reasons
Dunno if you missed it, but there was a lot of noise in the media recently about various tax fiddles (legal and illegal), non-doms, and so on, and it could be that banks are closing down accounts before the tax authorities start looking at them, simply because it's cheaper and less hassle.

1st Sep 2013, 07:22
There is nothing 'dodgy' about having an offshore bank account. The banks in the British jurisdictions (CI, IoM) have full and automatic disclosure to HMRC, and there are also disclosure agreements between EU states and others fortunate enough to be outside the EU.

Tax reasons ....... very simple. If you are NoR (not ordinarily resident) in the UK you are not subject to the same taxation as someone who is. The onshore banks are not set up to deal with this situation, those offshore are, although to some extent the distinction is now blurring. It is also quite legal and possible for someone who is UK resident to bank offshore, although this would be pointless and the offshore banks would probably be reluctant to accept such a customer.

There is an awful lot of garbage disseminated on this subject. In my past, I was the victim of an attempted blackmail attempt by a scorned female (hell hath no fury .....) who was going to 'report me to the police for having an illegal bank account in Jersey' unless I paid her £500. I told her to go ahead and that I'd rather take the consequences, even if my account were 'illegal', than submit to her blackmail attempt. I also pointed out to her than blackmail is a serious offence under English law and that I'd reported her to the police (I hadn't!), upon which she shat herself thinking she would be deported.

On a more serious note, I am going to be speaking to my relationship manager at the bank tomorrow and asking what their intentions are and if I am liable to be 'dumped'. Somehow I doubt if I will get an honest and straight answer, but I intend to look for a 'plan B' just in case.

Lon More
1st Sep 2013, 07:39
I closed down my accounts in the IoM several years ago but Barclays still keep sending me statements. I wrote to them a few times but can no longer be bothered. Just write, "Gone Away" and chuck it back in the letter box. Up to them if they want to waste the postage.

Their charges and exchange rates bordered on usury

1st Sep 2013, 07:56
I used to have a Bank of Scotland offshore account in Jersey for years for the same reasons as my old mucker, Al Streeter. About two years ago the bank wrote to me to say that they were closing BofS accounts and transferring them to Lloyds. They also mentioned that the charges were going to be about £40/month.
I could think of better things to do with that money so I closed the account.

1st Sep 2013, 08:03
Haven't heard of them cancelling bank accounts before but I have heard of people getting their credit card cancelled because they paid it by direct debit so the bank earned no interest, just the fee and any exchange charges that arose. Banks claimed it wasn't enough to service the card!

Had my Guernsey account since 1974 and now live in Australia, (left UK in 1989), so hopefully I am low profile to the tax people!

1st Sep 2013, 08:06
These changes have been brought about after pressure from the UK,EU and the USA. The Channel Islands have been resisting but have been made to jump through all sorts of hoops with the consequences as have been described above. When the likes of Delaware and London have been used as examples of dodgy banking practice there is an ominous silence and the same goes for the EU in regards to its accounts being audited and open to scrutiny. A case of do as I say and not as I do.Is it now fourteen years since the EU has been audited?
Anyway, Guernsey and Jersey are now on the OECD white list although the French with no explanation have censured Jersey last Friday and placed them on a black list.
Within the islands there is a sense of the 'green eyed monster' about the whole thing and I suppose it must rankle with the bigger neighbours to see jurisdictions being run with no national debt and up to a couple of years ago adding to their respective 'rainy day funds'. :hmm:

1st Sep 2013, 10:45
I believe the EU HAS been audited in the last 14 years - 14 times I think. Each audit was 'seriously qualified' in that the auditors were apparently not satisfied that the accounts were above board and that no frauds had been committed.

Frauds on the general population by the EU don't count......

1st Sep 2013, 13:54
radeng, my German friends tell me it's 17 years. They are not happy.

1st Sep 2013, 14:07
As usual there's a lot of rubbish written here about fraud and dishonesty and "cheating the tax man".

The facts are these.

1) There is downright fraud, illegally depriving HMRC of tax-based income. Nobody in their right mind indulges in this (unless you consider that taking some of your hard-earned money and using it to subsidise other wealthy nations such as China, India etc. is wrong, or giving it as benefits to immigrants who want to destroy the UK...and so on. Long list !) and you want to keep some of your money and take the risk of being caught.

2) There is minimising your tax liability by using the law as it is written. Only an idiot would not indulge in this. You pay what you have to, neither more nor less. For example, effective ways of minimising taxes by using on-shore and off-shore trusts are both well-known and completely legal. Or moving your domicile or residence or both to a low-tax area.

3) Finally, you cannot be bothered checking the law and you just hand over everything the HMRC asks for. If you are in this category you probably also buy goods the week before sales start, seek out the most expensive fuel for your car, and carry three suitcases on Ryanair flights to destinations paralleled by BA.


1st Sep 2013, 14:33
During the short period when I did have an offshore bank a/c in the mid-late '80s (non-interest paying), I never once complained about any shoddy treatment. However, I did once question why, on some of my monthly bank statements, I would sometimes see strange transactions appearing (for amounts easily exceeding 10 times the average balance on the a/c) but which would always be "cancelled-out" before the month-end. I never did get any reply to my letter (in those days, we mainly had just "slow" mail) in question.

These days, the offshore banks even give you credit cards apparently. And what more efficient method of making any dubious or questionable assets to be available for "immediate use" (compared to having to make a bank transfer to a regular "onshore" account) as previously...?!

Presumably, if all such credit card uses fall below US$ 10,000 per transaction or whatever it is these days, noone really gives a damn... :ok:

1st Sep 2013, 14:37
There are two reasons why offshore banks are closing accounts.

Firstly, the costs of complying with the US FATCA legislation falls entirely on the overseas banks. And this cost is huge. Why incur this cost unnecessarily?

Secondly, with regard to NatWest (and RBS), its main shareholder finds it awkward to own subsidiaries in tax havens and is running them down as fast, but discreetly, as it can.

There is no such as being Not Ordinarily Resident in the UK anymore. One is either Resident or Not Resident.

1st Sep 2013, 15:13
the offshore banks even give you credit cards apparently. And what more efficient method of making any dubious or questionable assets to be available for "immediate use" (compared to having to make a bank transfer to a regular "onshore" account) as previously...?!

I fail to see the coherence in this statement. A credit card is primarily a means of payment, and at the end of the billing cycle or agreed payment period, the amount due has to be paid back, from an account. So whilst the payments on the card may not be queried, the money going through the account is subject to normal banking procedures.

1st Sep 2013, 15:31
Not if the $ figure is less than $10,000.

As airship said, keep it less than $10k and no one cares.

1st Sep 2013, 15:40
I was told that the figure is 5000 in sterling or euros. But does anyone know ? Certainly transfers of under €5000 aren't queried, no matter how many you make how often.

1st Sep 2013, 15:46
In Aus, it is $10,000 and I vaguely remember seeing it written
a long time ago that this was brought in as a standard. Not sure
if they just copy the US or if this is a world wide amount.

1st Sep 2013, 15:47
From HMRC website :

The term High Value Dealer has a special meaning under The Money Laundering Regulations 2007. The Regulations describe a High Value Dealer as any firm or sole trader that receives high value payments of €15,000 or more in cash in exchange for goods.
A high value payment is a payment in any currency equivalent to €15,000 which is made either in a single transaction or in several installments which are linked. Cash payments made to you in person or directly into a bank account are high value payments if they meet the above criteria.
Below is a summary of all the circumstance that HMRC class as High Value Payments:

a single cash payment of 15,000 Euros or more
several cash payments totalling 15,000 Euros or more, including a series of payments and payments on account
cash paid by a customer totalling 15,000 Euros or more in any 90 day period
cash payments totalling 15,000 Euros or more which appear to have been broken down into smaller amounts to come below the High Value Payment limit

From Forbes :
In the government plan (http://www.gouvernement.fr/sites/default/files/dossier_de_presses/conseil_national_de_lutte_contre_la_fraude_dp.pdf) labeled “Fight against fraud,” France’s fiscal residents would see the cash transaction limit decrease from €3,000 to €1,000 per purchase. However, in a nod to the exiled wealthy and what Wolf Richter calls (http://www.testosteronepit.com/home/2013/2/12/draconian-cash-controls-are-coming-to-france.html) the “Depardieu exception,” those fiscal residents of a country other than France would have their cash transaction limits reduced from €15,000 to €10,000 per purchase. Legislative measures could be finalized by the end of 2013.

As one might expect under communism/jealousy.