Unexpected request to confirm tax residency - Halifax

Amata wrote: »

Interestingly I just received two of these letters - one from Halifax and the other from Lloyds.
I'm a UK citizen who's been living in Ireland for the past 5 years, no new accounts in easily 8-10 years though with either bank, so am guessing they've only just around to updating their details about me...

Am presuming that I will have to give them my Irish PPS number rather than my UK NI number though -

You should give them all your current tax residencies. If you are UK tax resident you can give them your UK tax ID number (an NI number or UTR). If you are Irish tax resident then yes, you confirm that and give them your Irish tax ID number (which for an individual in Ireland is a PPS).

don't really know why they might need that - would the Irish details be any of their business since it's from another country??

Because the UK government has agreed with about 100 other countries that they will participate in an OECD agreed programme of automatic exchange of information for tax purposes in which financial institutions here will share information about their customers with HMRC who will forward it to the home country tax authorities of the jurisdictions in which those customers are tax residents. You could read about that here http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/

Within the EU there is a Directive which tells the individual countries they have to implement local laws compliant with the international agreements and how to go about doing it, but the UK was an early signatory to the OECD multilateral convention anyway, whether or not Europe got involved.

In order for HMRC to do this, they have to get the data from the banks - and the banks if they don't know your tax ID and countryof tax residence for certain, will have to get it from you - otherwise they will have to guess on your country of tax residence and the data they submit about your account balances and interest earnings will only include date of birth and address etc and could get muddled up with someone elses, leaving your local tax authority thinking you have more income or assets than you actually do. So it is best to participate and provide your tax ID information so they are receiving 'neat and tidy' data rather than a load of guesswork.

But basically the banks are duty bound to collect this from you so that they can submit information annually about your accounts to HMRC who will share it with your home country tax authority.

Similarly the other way round, if you were UK resident with bank accounts in Ireland (or the other tens of countries participating in the scheme including France, Germany, Channel Islands, Australia, etc etc etc) you would give them your UK tax ID so that the bank could report your details to their local tax authority so that it could be shared with HMRC.

Glad I found this thread though as I wanted to confirm that these letters are real - it's been so long since I moved to Ireland that I thought any moving country correspondence would have been done with years ago...

The information-sharing for "US FATCA" and the UK's equivalent regime for its Crown Dependencies and Overseas Territories (e.g. Isle of Man, Guernsey, Cayman, Gibraltar etc) began in 2014. The extension of this to cover the OECD's "Common Reporting Standard" and the other 100-odd countries only began for the 2016 calendar year onwards and banks in UK and Ireland have until 31/12/17 at the very latest to conclude on the status of their pre-existing accountholders.

If you moved country years ago they may not have been required to collect your foreign tax ID if it pre-dated the current rules, but they are required to look into it now. The EU savings directive which had been going for a decade or more already provided for some information reporting to allow people to effectively be taxed on interest receipts in their home countries, but this has been superseded with more comprehensive and internationally-agreed rules.

The new rules cover information to be shared automatically by banks, brokers, investment funds and some insurance companies to improve the quality of information shared annually automatically for tax purposes, rather than one country having to specifically request it from another.

The relevant HMRC link: "Automatic Exchange of Information: accountholders" - is here