So much for €100,000 protection - Cyprus bailout

opinions4u

http://www.bbc.co.uk/news/business-21797888

People with less than 100,000 euros in Cypriot bank accounts will have to pay a one-time tax of 6.75%, while those with more will have to pay 9.9%. It is expected to raise 5.8bn euros in additional revenue

Ouch! That's a real kick in the gonads for prudent savers.

I'm assuming UK savers with Cyprus banks should check who protects their savings. Some will be FSCS, which I'm guessing is fine. What about the others?

ColdIron

I saw that this morning in the WSJ, this caught my eye as well

"We have taken immediate measures so that electronic transfers cannot take effect before banks reopen on Tuesday"

socrates

Its most probably linked to taxing the billions that the Russians have stashed away - undeclared and unaccounted for

Similar to the mansion tax in the UK how many of those £2 million plus houses are owned by Russians?

Mickygg

Blimey! 10% one off tax!!Hit the Russians yes, but not honest workers trying to save.

atush

If you have less than 100K they are charging poor working people only 6.75%.

Highway robbery.

socrates

atush wrote: »

If you have less than 100K they are charging poor working people only 6.75%.

Highway robbery.

There is a lot of undeclared money in Cyprus I suppose this is some kind of correction

Perhaps this is the start of similar behaviour by other European countries - perhaps to gauge the reaction

antrobus

opinions4u wrote: »

...I'm assuming UK savers with Cyprus banks should check who protects their savings. Some will be FSCS, which I'm guessing is fine. What about the others?

I'd imagine it depends on whether or not the 'Cypriot bank' in question is either (a) a branch of a Cyprus authorised bank operating in the UK under the EEA passport scheme, or (b) an actual UK bank that just happens to be the subsidiary of a Cyprus authorised bank.

E.g. the Bank of Cyprus UK Limited might well be the wholly-owned subsidiary of the Bank of Cyprus Public Company Limited, which is incorporated in Cyprus, but it is a company registered in England and Wales with its own UK banking licence. I would not have thought that this levy on bank deposits would apply to deposits with the Bank of Cyprus UK Limited, any more than it would apply to any other UK bank.

As long as the Bank of Cyprus UK Limited remains solvent, there would be no need to invoke the FSCS anyway.

socrates

They separated them a while back - UK arm is totally independent

p00hsticks

That's a b*mmer!

But I'm not sure that the references to the FSCS or the 100,000 Euro protection are really relevant in the circumstances described ? Surely that refers to cases where an individual bank goes under ?

In this country, we generally get taxed 20% at source in our savings interest. If the government suddenly decided to increase that rate, or to impose some sort of one-off 'windfall' tax on savings of the type described (v unlikely, I know), I don't see that the FSCS guarantees would come into it at all ?

socrates

p00hsticks wrote: »

That's a b*mmer!

But I'm not sure that the references to the FSCS or the 100,000 Euro protection are really relevant in the circumstances described ? Surely that refers to cases where an individual bank goes under ?

In this country, we generally get taxed 20% at source in our savings interest. If the government suddenly decided to increase that rate, or to impose some sort of one-off 'windfall' tax on savings of the type described (v unlikely, I know), I don't see that the FSCS guarantees would come into it at all ?

+1 for sure

ColdIron

I don't think the FSCS has any part to play in this, it is designed to provide protection in the event that an organisation cannot meet its financial obligations

This looks more like a Brown-esque grab or raid