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UK banks and brokers after Brexit

Financial discussion for any financial queries for Expats
Rob625
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UK banks and brokers after Brexit

#363372

Postby Rob625 » December 6th, 2020, 7:39 am

I moved to Italy over ten years ago. I still own a flat in London, now rented out, and I still pay tax in the UK as well as in Italy. I kept on accounts with one UK bank and two stockbrokers, telling them all my new address. Apart from the fact that I cannot add to my ISAs (which is a government rule), everything has been working fine. I receive some paper mail, which can take up to 3 weeks to get here, but I do almost everything online.

Now my bank, Nationwide, say that with Brexit my account needs to be closed. I knew that might happen, but it is a pain. I have used Transferwise for several years and have found their currency conversion and transmission from my UK to my Italian bank to be excellent. In anticipation of the end of service by Nationwide I set up a GBP balance at Transferwise. They are not a real bank, but they let you hold balances in several currencies, and give you a UK bank sort code and account number for your GBP balance, so it is very much like having a current account. I suppose the main difference is that you are not protected by the £85k government guarantee, so that it is not wise to keep a lot of money there in the long term. But it works fine for payments in and out, and even direct debits and standing orders. I moved the few remaining regular transactions that I had with Nationwide to Transferwise, the main one being receipt of rent, and that works fine.

My main stockbroker is Equiniti, Eqi, which used to be Selftrade and before that Comdirect. I have a ISAs and also a non-ISA dealing account with them. I have tried to contact them to ask whether they intend to continue offering service to clients who like me live in Europe. I got a reply from them which did not answer the question; it only says that I cannot add to the ISA, which I knew, and which hasn’t changed. Nothing as to whether they intend to stop offering service. I was vaguely aware that their customer service had deteriorated over the years, perhaps with the changes of name and ownership, but it hasn’t mattered to me much because I am now a very inactive investor. I am now inclined to transfer out from Equiniti, because I don’t want to go through the pain of changing the bank account I have registered with them (currently Nationwide) only to find that they stop offering me service.

The other stockbroker is Interactive Investor, ii. I have this account because I used the scheme set up by my favourite investment trust, Personal Assets Trust. Currently I have no bank account connected there. Their website gives quite a lot of information about their services to clients outside the UK, so it looks as if they are not going to be shutting down their service. One can connect bank accounts in more than one currency, with the only requirement being that the address is the same as that held by ii. So I should be able to send them details of my Italian EUR current account. If I want to move money I will have to get ii to do the conversion GBP – EUR. That seems to be quite easy. I would prefer to use Transferwise, and in fact I asked ii to set up with my Transferwise GBP account, but I have just heard from them that they can’t do that because Transferwise is not a bank.

So probably the simplest thing for me to do will be to register my Italian bank account with ii and accept the nuisance of their conversion. Less urgently, I can transfer from Eqi to ii and leave Eqi.

The alternative would be to find a bank that will accept me as a new customer, living in Italy, holding a GBP account. The little bit of research I have done suggests that there are very few possibilities, and that those there are may be quite expensive. I don’t object to paying reasonable charges for services that are useful to me, but my needs here are very simple and I don’t want to pay for a luxury service.

I looked at a few banks and brokers on TrustPilot. ii are rated very highly, 4.7 out of 5 from over 10k reviews. I see no other broker over 3.5, and many big names are below 2.0. I’m not sure how much weight to give this, but it is encouraging.

Well, this turned into a rather long post. I hope it may be of interest to others in a similar position, and I would be very interested in comments or helpful information if others have found solutions. One thing I don’t want to discuss though is the fact that I told all the UK players that my address is in Italy. That decision is in the past and I don’t think there is anything to be gained by revisiting it. Thanks.

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Re: UK banks and brokers after Brexit

#363409

Postby johnhemming » December 6th, 2020, 10:27 am

This sort of thing is a bit of a "you and whose army" type of question.

If it is against EU law for you to trade in the UK, but not against UK law what consequences are there for either you (probably none) or the broker you are trading with (depends on their dealings with the EU and how enforceable things are).

Given that we still don't know whether there is going to be a deal this is an almost impossible question to answer today. It may be easier to answer at the end of next week.

I do think the deal or no deal question will be answered by Wednesday, but I may be wrong.

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Re: UK banks and brokers after Brexit

#363457

Postby Spet0789 » December 6th, 2020, 12:55 pm

I’m not sure how II can legally continue to provide with you with stockbroking services if you’re based in the EU.

They may be taking the view that they’ll wait until the Italian regulators pull them up on it, this may take a while, and then they will stop. They would be breaking Italian law, and perhaps they’re relaxed about that.

A bank wouldn’t be, but a brokerage is perhaps less concerned if they have no assets in Italy which could potentially be seized. Of course senior executives could be nicked on arrival at Florence airport when they go for their summer holidays in Tuscany.

IIRC, this happened to a senior executive of a U.K. online betting company when he went to the US for a family holiday.

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Re: UK banks and brokers after Brexit

#363552

Postby PinkDalek » December 6th, 2020, 6:58 pm

It may not assist but have you read the earlier thread on this board, which may conceivably contain something of interest?:

Some UK banks start to withdraw accounts from UK citizens in the EU
viewtopic.php?f=77&t=25330

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Re: UK banks and brokers after Brexit

#363563

Postby scrumpyjack » December 6th, 2020, 7:23 pm

This website seems to be saying that an Italian resident can have brokerage accounts outside the EU

https://brokerchooser.com/how-to-invest/trading-account

It may not be the same as the issues with bank accounts?

Also US citizens abroad have huge problems but that presumably does not apply to the OP

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Re: UK banks and brokers after Brexit

#363666

Postby Rob625 » December 7th, 2020, 10:57 am

Thanks for the replies. Yes, I did read the earlier thread. As this is a slightly different and rather pressing practical problem, I thought I would start a new one.

As I understand it there is no law that prevents me as a resident of Italy from having a UK bank account, and the same for brokerage. There are global brands like HSBC that operate internationally. What is changing with Brexit is the hoops that banks and brokers have to jump through to offer such services. Some, like ii, seem to intend to do what they have to in order to go on; others, like Nationwide, decide not to. I think this is just a business decision on their part, and I don't blame them; it just happens to be a nuisance for me, because I have to look for a replacement.

Or maybe I can get by, just using Transferwise. That would mean leaving eqi, which won't bother me much. I am still waiting to hear whether ii will accept Transferwise, though. If not, I will probably look harder at getting a new UK bank account.

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Re: UK banks and brokers after Brexit

#363683

Postby Spet0789 » December 7th, 2020, 12:03 pm

scrumpyjack wrote:This website seems to be saying that an Italian resident can have brokerage accounts outside the EU

https://brokerchooser.com/how-to-invest/trading-account

It may not be the same as the issues with bank accounts?

Also US citizens abroad have huge problems but that presumably does not apply to the OP


Assuming this website is reliable, this section is most relevant: "For Europeans, it is possible to open a broker account in another EU country. What's more, you can also open accounts in the US or at a Swiss broker."

What this means is that an Italian resident can open a brokerage account in any EEA country (no surprise there) and that there is also clearly an equivalence agreement in place with the US. So if the EU makes an equivalence determination in favour of the UK for retail stockbroking, then no issue. Logically they should, but why would they? The UK has already granted equivalence the other way, so by dragging their feet on equivalence, the EU will force: (i) clients of UK brokerages to move to EEA brokerages; or (ii) UK brokerages to set up EEA regulated subsidiaries for onshore EEA business. Both are in the EU's interests, and the EU has the sovereign right to drag its feet in this way.

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Re: UK banks and brokers after Brexit

#363685

Postby Spet0789 » December 7th, 2020, 12:06 pm

Rob625 wrote:As I understand it there is no law that prevents me as a resident of Italy from having a UK bank account, and the same for brokerage.


This is correct (although Italy may place on you a disclosure obligation, as the US has with FATCA). The issue is whether it is legal for the bank or brokerage to provide you, an Italian resident, with those services. Without an EEA passported entity or a specific regulatory decision on equivalence, the default answer is no.

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Re: UK banks and brokers after Brexit

#363686

Postby scrumpyjack » December 7th, 2020, 12:09 pm

Just open an account with a US brokerage then. You will probably get a much better service and more competitive fees.

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Re: UK banks and brokers after Brexit

#363938

Postby stevensfo » December 8th, 2020, 9:49 am

Rob625 wrote:Thanks for the replies. Yes, I did read the earlier thread. As this is a slightly different and rather pressing practical problem, I thought I would start a new one.

As I understand it there is no law that prevents me as a resident of Italy from having a UK bank account, and the same for brokerage. There are global brands like HSBC that operate internationally. What is changing with Brexit is the hoops that banks and brokers have to jump through to offer such services. Some, like ii, seem to intend to do what they have to in order to go on; others, like Nationwide, decide not to. I think this is just a business decision on their part, and I don't blame them; it just happens to be a nuisance for me, because I have to look for a replacement.

Or maybe I can get by, just using Transferwise. That would mean leaving eqi, which won't bother me much. I am still waiting to hear whether ii will accept Transferwise, though. If not, I will probably look harder at getting a new UK bank account.


You could also open a Revolut and Monese account, both free and EMIs, like Transferwise. Monese is a bit weird in that they give you a separate card for pounds and euros. You could also open an N26 account, an official German bank with the 100 000 euro guarantee. Both Revolut and Monese give you a Euro IBAN and also a UK bank acc. number and sort code, though to be honest, I don't know if this will continue in 2021.

As you probably now realise, it was a mistake not to keep an address going in the UK and to have told your banks. If you have any address you could use - parents, siblings - it may be worth while getting stuff sent there and slowly re-establishing a 'presence' in the UK. I learned this lesson many years ago and remember some excellent posts in TMF that advised to always keep a foot in each country (or a hand as well if more required) and never let the left foot know what the right foot is doing. ;)

Steve

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Re: UK banks and brokers after Brexit

#364046

Postby Lootman » December 8th, 2020, 1:21 pm

stevensfo wrote:As you probably now realise, it was a mistake not to keep an address going in the UK and to have told your banks. If you have any address you could use - parents, siblings - it may be worth while getting stuff sent there and slowly re-establishing a 'presence' in the UK. I learned this lesson many years ago and remember some excellent posts in TMF that advised to always keep a foot in each country (or a hand as well if more required) and never let the left foot know what the right foot is doing. ;)

Yes, I have long been of the opinion that it is no business of any financial institution where I happen to be residing. They merely need an address for post. Nor am I aware that there is any legal obligation to tell such institutions which country you are in at any one time.

The only exception might be for an insurer whose underwriting makes assumptions about where you live, as they might later use that as an excuse to deny a claim.

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Re: UK banks and brokers after Brexit

#364066

Postby Spet0789 » December 8th, 2020, 2:12 pm

Lootman wrote:
stevensfo wrote:As you probably now realise, it was a mistake not to keep an address going in the UK and to have told your banks. If you have any address you could use - parents, siblings - it may be worth while getting stuff sent there and slowly re-establishing a 'presence' in the UK. I learned this lesson many years ago and remember some excellent posts in TMF that advised to always keep a foot in each country (or a hand as well if more required) and never let the left foot know what the right foot is doing. ;)

Yes, I have long been of the opinion that it is no business of any financial institution where I happen to be residing. They merely need an address for post. Nor am I aware that there is any legal obligation to tell such institutions which country you are in at any one time.

The only exception might be for an insurer whose underwriting makes assumptions about where you live, as they might later use that as an excuse to deny a claim.


I hope you never need a mortgage, or any other loan for that matter.

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Re: UK banks and brokers after Brexit

#364067

Postby Lootman » December 8th, 2020, 2:14 pm

Spet0789 wrote:
Lootman wrote:
stevensfo wrote:As you probably now realise, it was a mistake not to keep an address going in the UK and to have told your banks. If you have any address you could use - parents, siblings - it may be worth while getting stuff sent there and slowly re-establishing a 'presence' in the UK. I learned this lesson many years ago and remember some excellent posts in TMF that advised to always keep a foot in each country (or a hand as well if more required) and never let the left foot know what the right foot is doing. ;)

Yes, I have long been of the opinion that it is no business of any financial institution where I happen to be residing. They merely need an address for post. Nor am I aware that there is any legal obligation to tell such institutions which country you are in at any one time.

The only exception might be for an insurer whose underwriting makes assumptions about where you live, as they might later use that as an excuse to deny a claim.

I hope you never need a mortgage, or any other loan for that matter.

Why would that be affected?

Although it is very unlikely I would ever need to take on debt again.

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Re: UK banks and brokers after Brexit

#364070

Postby Spet0789 » December 8th, 2020, 2:19 pm

Lootman wrote:
Spet0789 wrote:
Lootman wrote:Yes, I have long been of the opinion that it is no business of any financial institution where I happen to be residing. They merely need an address for post. Nor am I aware that there is any legal obligation to tell such institutions which country you are in at any one time.

The only exception might be for an insurer whose underwriting makes assumptions about where you live, as they might later use that as an excuse to deny a claim.

I hope you never need a mortgage, or any other loan for that matter.

Why would that be affected?

Although it is very unlikely I would ever need to take on debt again.


It is conventional when lending against a property to want to know where it is, and when providing someone with credit to want to know where they live.

Given your broad experience of financial matters, I would have thought that you knew that!

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Re: UK banks and brokers after Brexit

#364072

Postby Lootman » December 8th, 2020, 2:21 pm

Spet0789 wrote:
Lootman wrote:
Spet0789 wrote:I hope you never need a mortgage, or any other loan for that matter.

Why would that be affected?

Although it is very unlikely I would ever need to take on debt again.

It is conventional when lending against a property to want to know where it is.

They would know where the property was. They just would not know where I was.

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Re: UK banks and brokers after Brexit

#364097

Postby stevensfo » December 8th, 2020, 3:08 pm

Spet0789 wrote:
Lootman wrote:
stevensfo wrote:As you probably now realise, it was a mistake not to keep an address going in the UK and to have told your banks. If you have any address you could use - parents, siblings - it may be worth while getting stuff sent there and slowly re-establishing a 'presence' in the UK. I learned this lesson many years ago and remember some excellent posts in TMF that advised to always keep a foot in each country (or a hand as well if more required) and never let the left foot know what the right foot is doing. ;)

Yes, I have long been of the opinion that it is no business of any financial institution where I happen to be residing. They merely need an address for post. Nor am I aware that there is any legal obligation to tell such institutions which country you are in at any one time.

The only exception might be for an insurer whose underwriting makes assumptions about where you live, as they might later use that as an excuse to deny a claim.


I hope you never need a mortgage, or any other loan for that matter.


I don't understand what the problem is. When working in North Italy, we got a mortgage from BNL Paribas and I never had any difficult questions about my pension or ISAs in the UK. The mortgage was given on the strength of type of work contract, salary and of course, the deposit. If you shop around, you will find banks offering mortgages for anyone. As I said, the important factors are deposits and other guarantees that the bank will get their money back if you accidentally crash into a castle while checking your eyesight.

We have colleagues from all over Europe who maintain properties in their home countries, pay tax on any rental income and rarely have any problems. Owning a property in Italy is actually quite cheap, since there is no equivalent of Council Tax on the primary residence. On second homes, it gets more expensive, but affordable since they use them for holidays. Most italians have second homes due to them rarely having more than two children and thus they keep inheriting property and second properties from grandparents etc. Thus, while their salaries are pretty low, it's surprising how much capital they have.

Steve

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Re: UK banks and brokers after Brexit

#364099

Postby dspp » December 8th, 2020, 3:14 pm

stevensfo wrote:
Spet0789 wrote:
Lootman wrote:Yes, I have long been of the opinion that it is no business of any financial institution where I happen to be residing. They merely need an address for post. Nor am I aware that there is any legal obligation to tell such institutions which country you are in at any one time.

The only exception might be for an insurer whose underwriting makes assumptions about where you live, as they might later use that as an excuse to deny a claim.


I hope you never need a mortgage, or any other loan for that matter.


I don't understand what the problem is. When working in North Italy, we got a mortgage from BNL Paribas and I never had any difficult questions about my pension or ISAs in the UK. The mortgage was given on the strength of type of work contract, salary and of course, the deposit. If you shop around, you will find banks offering mortgages for anyone. As I said, the important factors are deposits and other guarantees that the bank will get their money back if you accidentally crash into a castle while checking your eyesight.

We have colleagues from all over Europe who maintain properties in their home countries, pay tax on any rental income and rarely have any problems. Owning a property in Italy is actually quite cheap, since there is no equivalent of Council Tax on the primary residence. On second homes, it gets more expensive, but affordable since they use them for holidays. Most italians have second homes due to them rarely having more than two children and thus they keep inheriting property and second properties from grandparents etc. Thus, while their salaries are pretty low, it's surprising how much capital they have.

Steve


The problem is Brexit. The UK is no longer in the EU. That makes all the difference.

regards, dspp

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Re: UK banks and brokers after Brexit

#364143

Postby stevensfo » December 8th, 2020, 4:37 pm

dspp wrote:
stevensfo wrote:
Spet0789 wrote:
I hope you never need a mortgage, or any other loan for that matter.


I don't understand what the problem is. When working in North Italy, we got a mortgage from BNL Paribas and I never had any difficult questions about my pension or ISAs in the UK. The mortgage was given on the strength of type of work contract, salary and of course, the deposit. If you shop around, you will find banks offering mortgages for anyone. As I said, the important factors are deposits and other guarantees that the bank will get their money back if you accidentally crash into a castle while checking your eyesight.

We have colleagues from all over Europe who maintain properties in their home countries, pay tax on any rental income and rarely have any problems. Owning a property in Italy is actually quite cheap, since there is no equivalent of Council Tax on the primary residence. On second homes, it gets more expensive, but affordable since they use them for holidays. Most italians have second homes due to them rarely having more than two children and thus they keep inheriting property and second properties from grandparents etc. Thus, while their salaries are pretty low, it's surprising how much capital they have.

Steve


The problem is Brexit. The UK is no longer in the EU. That makes all the difference.

regards, dspp


When I worked in France, my boss was from the east end of London and started working in Germany before the UK joined the EEC. It all depends on whether you have a job or not. Employment and residence is the key, not nationality. Don't get me wrong. I think that Brexit is the most stupid and biggest mistake in British history and PhD theses will be written over hundreds of years about how foreign-owned tabloids and the ultra-rich elite brainwashed and lied to the British people, but for the normal person, if they have a skill that is in demand, they will still find a job in the EU.

As far as I'm aware, most of the expensive mansions in London are owned by Americans, Ukrainians, Russians, Africans and South Americans who come and go and do as they please without being in the EU.

It remains to be seen what exactly will change. I am the only native English speaker in our department and years ago, used to spend a lot of time checking and correcting the documents, which had to be in English. However, now that most EU secretaries have a better grasp of English grammar than the Brits, my services are not in demand so much. Good that I retire in a few years! ;)

Steve

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Re: UK banks and brokers after Brexit

#364151

Postby dspp » December 8th, 2020, 4:56 pm

stevensfo wrote:
dspp wrote:
stevensfo wrote:
I don't understand what the problem is.
Steve


The problem is Brexit. The UK is no longer in the EU. That makes all the difference.

regards, dspp


Don't get me wrong. I think that Brexit is the most stupid and biggest mistake in British history and PhD theses will be written over hundreds of years about how foreign-owned tabloids and the ultra-rich elite brainwashed and lied to the British people, but for the normal person, if they have a skill that is in demand, they will still find a job in the EU.....
It remains to be seen what exactly will change. ...

Steve


I completely agree with your sentiments re the stupidity of Brexit, but that's not the point here. You asked, what has changed. What has changed is Brexit. The UK is now outside the EU. That is what is causing these banking & brokerage & etc issues. These and many other things are real changes, happening now.

regards, dspp

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Re: UK banks and brokers after Brexit

#364167

Postby Lootman » December 8th, 2020, 5:47 pm

dspp wrote:
stevensfo wrote:It remains to be seen what exactly will change.

You asked, what has changed. What has changed is Brexit. The UK is now outside the EU. That is what is causing these banking & brokerage & etc issues. These and many other things are real changes, happening now.

The remedy for that is what Steve suggested earlier: That when relocating from the UK to Italy (or wherever), one should retain a valid UK address for mail purposes. Absent any notification, each UK financial entity that you deal with will just assume that you are a UK resident, and the service will continue as normal.

Our hypothetical expat will also have an address in Italy, which will serve for all his Italian financial needs. Neither set of financial entities will be aware of the other set, as long as you are careful to keep them demarcated.

This strategy is already useful to avoid the problem mentioned in the other TLF topic cited earlier, that UK banks and brokers may not want to continue servicing an expat anyway, EU or not.

I do not believe that any law is being broken by doing this, just maybe the terms and conditions of each institution. With care that would never be discovered. I assume here that declarations made for tax purposes do not bleed into files held by institutions - that seems unlikely since tax returns are considered confidential.

In which case the main effect of Brexit is that people who move around a lot are more likely to keep quiet about where they live, and maintain parallel addresses (not residences).


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