Icesave crisis - What happens to those of us with above £50k in our account?

LPHUK

GEOFFREYK wrote: »

government takes its cut of interest via tax, could you offset any losses against tax

I did think about this. I'm self employed and therefore wondered if it was possible. However the money is in a personal savings account so not sure if it needs to be in a business account to class as a business loss

tomterm8

vagabond999 wrote: »

Is there a chance we can recoup any of our money above the £50k mark or is that it, are we screwed?

There is a chance you will recover more than 50k. What's going to happen is that the UK govt will guarantee up to 50k of your savings in event of default. However, the bank still has numerous assets, and so all the rest of the money will form a claim upon those assets like other creditors.

My understanding is that under Icelands bankruptcy law, as it is being amended, retail deposit customers will have first claim on any proceeds of asset sales, ahead of bond holders and other unsecured creditors.

This suggests that eventually you will get a high percentage of your money back.

edwinac_2

vagabond999 wrote: »

My father sadly passed away last year and upon recieving my inheritence I invested £80+k into my Icesave account on the apparant sound advice that Icesave had one of the safest and best value interest accounts for me.

I watched with horror this morning as I heard the news, then obviously like everyone else I'm frozen out. There's been a lot of talk about the £50k rescue package, but where does that leave people like me with more then that invested in Icesave? I almost feel like crying.

Is there a chance we can recoup any of our money above the £50k mark or is that it, are we screwed?

I'm really sorry to hear your story vagabond, especially given the origin of the money, your late father. I hope you recover as much of it as humanly possible.

I don't have any answers but this could take years to thrash out. It's possible that Landsbanki's loan book is okay, and that the bank can be sold as a going concern, perhaps, safeguarding your savings.

Try and stay optimistic. I'm sure that is what your father would have wanted. It doesn't feel quite so bad when you compare the loss of your savings to the dramatic fall in house values - something that every homeowner is facing today.

At this late stage, there's not a huge amount of point playing the 'blame game',

However, I want to chastise the anonymous posters on this forum who spent thousands of hours convincing everyone - even as the axe was falling - that Icesave was "completely safe".

Those shills should come forward and openly apologise for their despicable behaviour. There is strong evidence that some of those posters worked for Landsbanki itself.

Those shills put their jobs before our livelihoods, and by doing so, we now find ourselves robbed, some of us by many thousands of pounds.

Jonbvn

pmorrison wrote: »

Hi, sorry to say this but Im pretty certain that theres no chance that you will get more than the £50k back, just think yourself lucky that the limit was raised but £15k today.

What facts do you base such statements on? The above is the worst case scenario, short of all of us entering the Thunderdome!

l33tsp33k

GEOFFREYK wrote: »

government takes its cut of interest via tax, could you offset any losses against tax

I would guess any loss could be declared as a loss on the capital gains pages, and carried forward against any capital gains in the future, or offset against income in the same tax year.

It is a capital loss because you have effectively invested money in Landisbanki and you (might!) have lost money on that investment.

Mike

cos69

tomterm8 wrote: »

There is a chance you will recover more than 50k. What's going to happen is that the UK govt will guarantee up to 50k of your savings in event of default. However, the bank still has numerous assets, and so all the rest of the money will form a claim upon those assets like other creditors.

My understanding is that under Icelands bankruptcy law, as it is being amended, retail deposit customers will have first claim on any proceeds of asset sales, ahead of bond holders and other unsecured creditors.

This suggests that eventually you will get a high percentage of your money back.

I suspect that this will only resolve itself in favour of depositors if we make a fuss about this. Needs a pressure group to be formed to ensure the administrators look after out interests otherwise all the money will just disappear to pay the Icelandic governments debts. Think thats what they meant when they talked about foreign asset repatriation

l33tsp33k

vagabond999 wrote: »

10. So, for example, assuming a 60% recovery rate, if a protected depositor has
£100,000 with the failed bank, he would initially receive £35,000 from the FSCS.
The FSCS would later receive a 60% recovery (£60,000) from the liquidator and pay
it over to the depositor. So the depositor’s total recovery would be £95,000 and the
loss £5,000. FSCS’s recovery would be nil.
11. To look at this in a different way, the depositor is entitled to a recovery of £60,000
from the failed bank, leaving him, at this stage, facing a potential net loss of
£40,000. But he is also entitled to compensation from the FSCS, which will cover up
to £35,000 of this loss. So his total recovery is actually £95,000.

This is interesting and useful information. To make this clearer, let's update with the new £50k limit, the "passport" exemption and some examples:

Say a depositor has £100k with Icesave, he will get the following compensation:

-- EUR 20,887 from the IDIGF, the Icelandic equivalent of the FSCS (if the Icelanders can't pay this the FSCS should step in)
-- the remainder of the basic £50k protection from the FSCS
-- if the liquidators recover 60% of the banks assets, then the depositor will get a further £50k and be fully compensated. The FSCS will get £10k (the leftover amount recovered by the liquidators)
-- if they only recover 30% of the banks assets, then the depositor will get a further £30k and be down £20k.

So, for once, we don't get screwed as much as the FSCS... we are first in line before the FSCS to get anything above £50k back. It could take a long time (years) to get anything from the liquidators though.

By the way, the FSCS is funded by the other UK banks... so it's them who are on the hook for 300,000 x £50k.

Mike

Reaper

LPHUK wrote: »

What do people think the prospects are of me changing it to a joint account? I could add my partners name and then get £100k cover (under the current rules) and therefore be OK.

The chances of success are low. I reckon they have to action it before they declare insolvency, but who knows they may yet be a few days as Iceland is still hoping to keep it running. Send it off first class or faster - the staff there should have little else to do but process it. You have nothing to lose and an outside chance of getting an extra £50,000. Go for it.

withabix

Why should my taxes be used to repay your lost offshore investments?

They shouldn't.

If you've invested in an Icelandic bank, then there is only one country who should be paying out.

...and it isn't the UK.

l33tsp33k

withabix wrote: »

Why should my taxes be used to repay your lost offshore investments?

It's not your taxes, it's the other banks that operate in the UK that pay for the FSCS.

If there's not enough in the pot from them, the FSCS can borrow from the government, but has to pay it back over time, with interest.

Mike