Anti Money Laundering and Bank Statements

RG2015

I have heard that bank statements need only be kept for 7 years as that is the limit for HMRC to claim unpaid tax. Since my banks now have 7 years of statements online I have no need to keep my old statements.

Is this correct or am I being a bit short sighted? I have read the advice on this site regarding PPI claims and keeping financial records indefinitely but I cannot think of anything I conceivably could claim for.

My specific concern here though is anti money laundering legislation. I am constantly moving thousands between banks to get the best returns. However I have no bank records more than 7 years old.

I am interested to hear the opinions of others here to determine what I should be doing in this new age of financial diligence and vigilance.

datlex

If you are moving your own money to get better interest rates on it when interest rates are as low as they are, that is not money laundering. Several bank accounts with reasonable interest rates have low limits and therefore you might want to move money in and out to maintain balances. I know with my bill payments these come out of three accounts. These three are funded by a 4th interest earning account as and when the bills are due. Each payday I add money to that account, if that amount takes it over the limit at which interest is earned I move the excess. Money is moved back and forward between all my accounts to meet my needs at the time.

societys_child

need only be kept for 7 years as that is the limit for HMRC to claim unpaid tax

I always thought there was no time limit on that?

pmjenkins

Same.

I came into a large sum of money ten years ago.

Since then I've been shuffling money from one savings (bank) account to another, in my name and my partner's. I've traded shares using three brokers, and occasionally transferred shares to / from my partner.

I'm now moving house. Fortunately I'm trading down so don't need to provide a deposit. But if I did I don't know how I'd manage to prove that the source of my funds was legitimate.

RG2015

datlex wrote: »

If you are moving your own money to get better interest rates on it when interest rates are as low as they are, that is not money laundering.

Thanks datlex!

Does this mean that as long as I am moving money between accounts in my name that I have nothing to worry about?

RG2015

societys_child wrote: »

I always thought there was no time limit on that?

I read this comment from Martin Lewis on this site.

"The conventional wisdom is you only need to keep bank, credit card and other personal finance documents for six years. This is because HMRC (the taxman) can only ask you to go back that far if you’re being investigated for tax purposes."

http://blog.moneysavingexpert.com/2013/08/12/dont-throw-bank-statements-away-after-six-years/

RG2015

pmjenkins wrote: »

Same.
I'm now moving house. Fortunately I'm trading down so don't need to provide a deposit. But if I did I don't know how I'd manage to prove that the source of my funds was legitimate.

I feel the same but is this fear irrational? Are people actually asked to prove that the source of their funds was legitimate?

societys_child

keeping records is different. I believe there is no time limit stops the tax man claiming unpaid tax and reclaiming overpaid benefits etc.

colsten

RG2015 wrote: »

I feel the same but is this fear irrational? Are people actually asked to prove that the source of their funds was legitimate?

You can be asked at any time about the source of your funds.

Uxb

The 7 year limit applies to uncollected tax provided the non collection does not arise out of blatant fraud by the taxpayer.
If it does the I.R can go back as far as they want.

EachPenny

My view is it comes down to space.

If you don't have space to keep old bank statements and are confident that you'll never need to refer to them then you know what to do.

The approach I'm adopting is while I have space in my finance filing system I'll keep on filling it up. When it gets full I'll think about shredding some of the oldest stuff. Based on current trends, I'll start shredding at something like 35 years. Which should be more than enough to see off any tax inspector

We had a similar approach at work. Documents were put into boxes and either labeled with the date or with "DND". The dated boxes were usually dumped after 10 years. I suspect the "DND" boxes will sit there until one day someone says "What does DND mean?" and decides to destroy them all anyway