Newcastle BS wants to close my ISA account

LemonTree_3

Hi,

I have informed Newcastle Building Society about my change of address. This new address is now in Germany.

Today, I received a confirmation letter and the last section says
"As per the terms and conditions of account ******* non UK residents are not permitted to operate a on-line account, therefore this account must be closed. This can either be done by transferring funds to your nominated bank account or a cheque to be sent to your home address only."

The above account Newcastle BS is referring to is a on-line ISA account which I opened in October 2009 ("Newcastle ISA+ (Issue 3)). My understanding was that ISA account can be remained open even if I move overseas!

I do not want to close that account and lose on-line access to my other Newcastle accounts. I couldn't find Newcastle Terms and Conditions on that hilarious condition of losing one's accounts once one moves overseas. Help!!! Does anyone have a good idea here?!

cloud_dog

Its not just a Newcastle BS thing, its based on the ISA rules.

You cannot expect to earn your interest tax free whilst not paying UK taxes on income earned; I think you'll agree to do that would be unreasonable.

Is this a permanent (or for a number of years) move to Germany, or are you being paid in Euro's in to a German bank?

KingL

LemonTree wrote: »

My understanding was that ISA account can be remained open even if I move overseas!

That's the HMRC rule. Institutions are entitled to have their own account rules on top of that.

You're pretty much snookered there.

In theory you could transfer it to another ISA, but [despite the fact you are entitled to keep your ISA as far as HMRC are concerned], you aren't allowed to open a new one]. You don't have a second one somewhere do you?

Maybe if you grovel a lot Nationwide would let you open a non-online ISA which you could transfer it into.

Other than that, you'd have to lie about your address. Which is illegal in this circumstance.

KingL

cloud_dog wrote: »

Its not just a Newcastle BS thing, its based on the ISA rules.

You cannot expect to earn your interest tax free whilst not paying UK taxes on income earned; I think you'll agree to do that would be unreasonable.

Actually ISA rules allow you to keep existing ISAs open while overseas, just not to open new ones.

apt

Whether it is hilarious or not many banks and building societies do not allow internet banking from outside the UK. Whether they enforce this restriction if you do not inform them is another matter, but if you have been using your internet banking from abroad and there is a problem with fraud your position could be affected. The ISA rules allow people who become non-residents to keep their existing ISA savings, but individual building societies might have their own rules requiring residence. If Newcastle do not allow you to keep your ISA you should transfer it. If Newcastle close the account and send you a cheque you have lost the ISA status for your savings.

LemonTree_3

Thank you for all your answers!

Looking at Newcastle's Terms and conditions I cannot see anything about the condition that a former UK resident cannot keep his account
http://www.newcastle.co.uk/content/savings/docs/General_Terms_And_Conditions.pdf

Can you?

cloud_dog

KingL wrote: »

Actually ISA rules allow you to keep existing ISAs open while overseas, just not to open new ones.

KingL, thanks for that. Do you know how long it is allowed for?

LemonTree_3

cloud_dog wrote: »

KingL, thanks for that. Do you know how long it is allowed for?

There is no time limit!

noh

LemonTree wrote: »

Thank you for all your answers!

Looking at Newcastle's Terms and conditions I cannot see anything about the condition that a former UK resident cannot keep his account
http://www.newcastle.co.uk/content/savings/docs/General_Terms_And_Conditions.pdf

Can you?

http://www.newcastle.co.uk/legal

Under the heading "Terms and conditions of Website use"

KingL

cloud_dog wrote: »

KingL, thanks for that. Do you know how long it is allowed for?

Yeah, no limit.

http://www.hmrc.gov.uk/isa/faqs.htm#14

But, at a practical level, as most ISAs interest rates turn to mush after a year, you'd probably end up with a load of nothing anyway. Unless you can get a fixed rate for the period that you are away for....

turbobob

I don't see why you couldn't transfer ISA's between providers while you were abroad, in order to get a better rate. Unless someone knows different? My understanding was that you could not add new money. Transferring money to a new provider is not technically opening a new ISA.

I would think if they forced you to close the account (losing your ISA tax free status) without at least giving you the opportunity to transfer it, simply because you had moved abroad, it would be against the spirit of the FSA's Treating Customers Fairly rules.