Non resident

PaulAnthony

Hi, I would appreciate some advice please.
I have lived in Spain since 2006 as a resident but continue to hold UK passport, NI number, bank account (using a friend's address) & am planning to return in 5 years when I'm 66. We don't earn enough to pay tax in Spain nor from a small pension in UK..
Soon I will inherit about 100k sterling & want to invest it until we return but would need access to it in case of an emergency.
Most savings accounts like Marcus that pay around 2% require you to be UK resident but it seems I could probably open an account with the criteria I already have. Some want utility bills but not all. Off shore accounts pay even less interest & charge, my Lloyds account cannot offer much & if I change into Euros there is even less interest plus the fluctuations of currencies.
What do you think? Bit dodgy or just do it.
Cheers
Paul

Alexland

You may wish to read the HMRC guidance on the UK residence test to determine if you qualify but on what you have told us it seems unlikely.

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt

BoGoF

If you are prepared to lie to get the account that is up to you.

Johnnyboy11

Worth checking that your plan won't compromise any FSCS protection. You never know...

dunstonh

Some want utility bills but not all.

The ones that dont will carry out an electronic ID check. How do you propose passing that ? (they check your name against the address - so electoral roll, credit history etc)

bowlhead99

BoGoF wrote: »

If you are prepared to lie to get the account that is up to you.

Ultimately, that's what it comes down to.

The usual reason it's unwise to lie to a UK bank and pretend that you are UK resident when you aren't, is because signing off that you are UK resident is something that they can declare to HMRC who would then expect you to pay tax on your worldwide income (and capital gains if relevant).

In your case however, that may not pose much of a risk in practice - if your Spanish income and UK income together is below the annual UK personal income allowance that you get as a UK citizen (£12.5k), and you don't have any capital gains, then your UK tax bill on that worldwide income and gains is going to be zero anyway, and so it doesn't really cost you anything on an annual basis to lie your way into the scope of UK tax.

So the 'risk' would just be whatever potential fallout you get from telling a bare faced lie to a financial institution about where you are resident, to con them into giving you access to product(s) in which you want to stash a six figure sum, which they don't offer to non-residents due to their own various commercial and regulatory compliance reasons.

And the £100k would require multiple financial institutions to ensure you don't go over the financial services compensation scheme limit of £85k per covered institution.

You mention that not all banks want utility bills to evidence your identity when opening an account, but some will, once you don't pass the electronic checks of being on electoral roll and having UK credit accounts etc. And when you can't prove your address to their standards and you instead 'decide to cancel your application' because you don't have proof of living at that address, they can choose to flag it on a suspicious activity report as if you were a potential fraudster or money launderer. Unlikely they would, but could. You would not want to appear on too many.

Eventually when you return to the UK you will presumably want to bring a whole bunch of "stuff" with you as part of immigrating -personal effects, furniture, TV and computer equipment, maybe a car etc. The nice chaps at Customs may ask what all this stuff is, have you paid UK duty and VAT on it? No, you reply, I'm immigrating to the UK after a long period of non-residency, living overseas and I have owned and used all this stuff overseas for a few years. Nothing to declare!

"That's interesting" they say, "our HMRC records suggest that you have actually been living here as a tax resident of the UK since 2019 or earlier? So how can you declare you've been living outside the UK and only just now repatriating?"

"Ah I see the problem Mr Customs Officer. It seems you have a mistake in your records. I have not really been a UK resident while acquiring all these goods overseas and now seeking to bring them in tax free. That would of course be a Naughty Thing! . No no it's a simple explanation. The only reason your records show I have been living in the UK for the last five years is because I am the kind of person who lies to bank or tax officials in order to obtain a financial advantage by deception."

"Oh right you are then Sir, that makes sense. I'm sure you're not trying to pull a fast one, but perhaps you'd better just step this way into the Full Body Cavity Search area and then we can proceed to all this paperwork "

You might be unfazed by any of the things mentioned above, but when dealing with substantial sums of money it's always worth thinking things through. Perhaps you think the last point is very far fetched, but in five years time who knows what information will be at the fingertips of HMRC officials, especially when we may not all be part of one happy EU family when you eventually relocate from one country to another...

If offshore GBP rates are too low and you decide not to deceive your way into an account with a UK bank that's only intended to be available to UK residents, you might consider NS&I, who do allow non residents to use some of their products.

boxwood

You should check with a Spanish tax advisor the double taxation treaty rules between Spain and the UK and whether your UK inheritance would be taxable in Spain.

You may feel you can keep it quiet, and maybe you could, but Spain has heavy penalties and a tough line on tax avoidance.

If Spain would tax you, maybe you can take advice in the UK to explore ways to mitigate the tax in Spain.

PaulAnthony

Thanks. Looks like NS&I then as the consequences are dire for not much more interest.
A visit to the local tax advisor also a must.