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  • FIRST POST
    • EdGasketTheSecond
    • By EdGasketTheSecond 13th Jun 19, 4:50 PM
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    EdGasketTheSecond
    Ex-Pat - Lying about residency to open an account - Consequences?
    • #1
    • 13th Jun 19, 4:50 PM
    Ex-Pat - Lying about residency to open an account - Consequences? 13th Jun 19 at 4:50 PM
    For an ex-pat it's neigh on impossible to open any sort of bank or broking account as soon as you declare foreign residency.



    Assuming a UK address is available to use, what would be the consequences of opening any non-ISA account, say an online broker trading account, and just letting them assume you are UK resident? I mean, assuming its not an ISA and you are fraudulently trying to get tax breaks, I can't see what the problem is so long as they can reach you at a UK address?
Page 1
    • xylophone
    • By xylophone 13th Jun 19, 4:56 PM
    • 31,374 Posts
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    xylophone
    • #2
    • 13th Jun 19, 4:56 PM
    • #2
    • 13th Jun 19, 4:56 PM
    For an ex-pat it's neigh on impossible to open any sort of bank or broking account as soon as you declare foreign residency.
    From the horse's mouth?

    Assuming a UK address is available to use, what would be the consequences of opening any non-ISA account, say an online broker trading account, and just letting them assume you are UK resident? I mean, assuming its not an ISA and you are fraudulently trying to get tax breaks, I can't see what the problem is so long as they can reach you at a UK address?
    Isn't there a declaration as to residency when you open an account?
    • TBC15
    • By TBC15 13th Jun 19, 5:15 PM
    • 829 Posts
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    TBC15
    • #3
    • 13th Jun 19, 5:15 PM
    • #3
    • 13th Jun 19, 5:15 PM
    I think the intention to fib is in the title.

    Not sure what the big deal is myself as long as the country you actually live/work in has no claim on tax arising from your investments.
    • EdGasketTheSecond
    • By EdGasketTheSecond 13th Jun 19, 6:30 PM
    • 1,255 Posts
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    EdGasketTheSecond
    • #4
    • 13th Jun 19, 6:30 PM
    • #4
    • 13th Jun 19, 6:30 PM
    Isn't there a declaration as to residency when you open an account?
    Originally posted by xylophone
    Some have, some just say in the T&C's you most be ordinarily resident in the UK. Anyway the question is the same.


    Another point is that if you are UK resident but then emigrate, in general you can keep accounts already open running; you just can't open a new one. This seems contradictory.
    • traineepensioner
    • By traineepensioner 13th Jun 19, 7:52 PM
    • 299 Posts
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    traineepensioner
    • #5
    • 13th Jun 19, 7:52 PM
    • #5
    • 13th Jun 19, 7:52 PM
    For an ex-pat it's neigh on impossible to open any sort of bank or broking account as soon as you declare foreign residency.



    Assuming a UK address is available to use, what would be the consequences of opening any non-ISA account, say an online broker trading account, and just letting them assume you are UK resident? I mean, assuming its not an ISA and you are fraudulently trying to get tax breaks, I can't see what the problem is so long as they can reach you at a UK address?
    Originally posted by EdGasketTheSecond
    I can't see a problem from the UK side and you'll only pay tax once you've exceeded your personal allowance for savings & investments. You don't say which country you are resident in but I know many expats in Spain that have kept their UK accounts after moving.
    However, if you're a resident (tax payer) in Spain for example, you would be subject Spanish tax on all your UK savings & investments. You wouldn't have to pay tax twice but the tax rate would be dependent on your country of residence.

    As an aside, we would love to move to Spain permanently but would lose too much income due to reduced allowances & increased Spanish tax rates.
    (https://www.spainaccountants.com/tax-rates)
    No longer trainee
    Retired in 2012 (54)
    State pension due 2024 (66)
    • EdGasketTheSecond
    • By EdGasketTheSecond 13th Jun 19, 8:20 PM
    • 1,255 Posts
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    EdGasketTheSecond
    • #6
    • 13th Jun 19, 8:20 PM
    • #6
    • 13th Jun 19, 8:20 PM
    It's not for me but someone else and it's Hong Kong. Great for tax so long as you dodge the rubber bullets.
    • bowlhead99
    • By bowlhead99 13th Jun 19, 8:57 PM
    • 9,361 Posts
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    bowlhead99
    • #7
    • 13th Jun 19, 8:57 PM
    • #7
    • 13th Jun 19, 8:57 PM
    I mean, assuming its not an ISA and you are fraudulently trying to get tax breaks, I can't see what the problem is so long as they can reach you at a UK address?
    Originally posted by EdGasketTheSecond
    Just to check: did you miss a word? Perhaps you mean that you can't see there's a problem "assuming its not an ISA and you are *not* fraudulently trying to get tax breaks"

    Because if you /are/ trying to fraudulently get a break on your taxes - e.g. by not declaring that you are resident in country X so that the broker doesn't include you as a country X resident on the automatic exchange of information report that they file annually with HMRC, so that HMRC doesn't forward your account balance and totals of your dividends, interest, and gross sales proceeds to country X's tax authority, thereby helping you evade your income, wealth or gains taxes in country X - then you could imagine how that might be seen as naughty.

    In the case of HK, where they don't tax international wealth, overseas dividend income, or have a capital gains regime, you would not have dodged any HK taxes because there were no HK taxes to pay on the UK account activity. But the UK broker was still supposed to report your activity to the HK tax authority via HMRC under the international financial account automatic information exchange agreement .

    , say an online broker trading account, and just letting them assume you are UK resident?
    It should not be the case that you are able to let them 'assume' you are a UK resident. Financial institutions are supposed to ask for an explicit confirmation of your residency status, and if they don't get it within a reasonable time, close the account.

    You mentioned in a follow up comment that you think you don't always have to declare your residency, and instead, that "some just say in the T&C's you most be ordinarily resident in the UK". However, have you actually tested that and gone through the account opening process with them?

    Because under the regulations, they are supposed to ask and you are supposed to tell them. So if there was later an argument about whether you did anything wrong, you wouldn't necessarily be able to say 'oh I didn't say I was resident in UK, you just assumed I was", because generally you will have actually told them that you were UK resident as part of the account opening process. Generally you can't open a financial account these days without being required to certify all your tax residencies.

    Extending that, the fact that you are running a brokerage account in the UK having told the broker that you are resident in the UK, means that you shouldn't be surprised if in due course they tell HMRC that you are earning X dividends making Y asset disposals etc. If you are not over your personal allowances as a UK citizen it is perhaps not a problem because HMRC wouldn't need to take tax off you. But what if HMRC, just for fun, write to tell you they are curious whether you, as a UK resident, have any more worldwide income that you need to tell them about?

    Will your response be that you are not really UK tax resident; that they have made a mistake and you really emigrated ages ago, and the only reason they hold the incorrect information that you are a UK resident is because you are the type of person who routinely lies about their residence status to financial institutions or other officials in order to obtain a financial advantage - such as more favourable account terms or being offered an account relationship which a financial institution would otherwise decline? Will that go down well with HMRC as a reason to believe they should trust that the self-admitted "fibber" is not UK resident at all and shouldn't pay UK taxes on his worldwide income?

    You may decide that the chance of the above happening is pretty remote, so you may decide to lie and obtain the account by deception.

    Anyway the question is the same.
    Basically you are asking what harm is done if you lie to them about where you are resident.

    In some countries it is an explicit offence under the local tax information exchange regulations to provide an inaccurate self-certification of status.

    However in the UK, it may only be a civil matter, i.e. a breach of trust between you and the service provider whereby you obtain services by deception; it would be up to them to make the case that they lost out financially by providing you with an account while being misled about who you were and where you lived, causing an extra compliance burden to be placed upon them (such as enhanced risk of getting black marks from the FCA in relation to anti-money laundering /countering terrorist financing regulations, or from HMRC in relation to conducting proper due diligence under the international automatic exchange of information regulations).

    In practice, they would be within their rights to close your accounts but it is not going to be worthwhile them suing you for what are minimal damages in the context of their overall existing compliance burden, especially when you are not even in the UK and therefore difficult to sue. You may just get blacklisted from opening accounts with other parts of their group, if they subsequently find out one way or another that you have been lying.

    Another point is that if you are UK resident but then emigrate, in general you can keep accounts already open running; you just can't open a new one. This seems contradictory.
    Originally posted by EdGasketTheSecond
    To play a little devil's advocate here, it is not contradictory.

    Closing your account when you emigrate would lose them a customer - who they may know to be a lucrative customer and worth whatever administrative hassle it is to keep that customer revenue stream despite some extra compliance work. So automatic closure is not always going to happen.

    By contrast, a new prospective customer from a foreign country - likely to create additional foreign account reporting obligations etc, maybe from a country without equivalent financial regulations or AML rules, for whom they do not already already know the source of wealth, source of funds, or account operating habits, and the financial institution may find it difficult to contact them in future, and the customer being based overseas might be more 'needy' from a customer servicing perspective etc etc - may just fall into the bucket of "generally, I can't be bothered taking on that sort of customer ; it won't harm my business to just turn down non-residents at the door instead".
    Last edited by bowlhead99; 13-06-2019 at 9:05 PM.
    • Herbalus
    • By Herbalus 13th Jun 19, 8:57 PM
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    Herbalus
    • #8
    • 13th Jun 19, 8:57 PM
    • #8
    • 13th Jun 19, 8:57 PM
    Assuming there are no consequences for the taxman or government (eg ISA as mentioned you can’t have if not a resident as it’s a government rule), then the only rule you’d be breaking is the terms and conditions of the provider.

    If they find out and if they care, the only thing they can really do is give you notice to close it.
    • Apodemus
    • By Apodemus 13th Jun 19, 9:04 PM
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    Apodemus
    • #9
    • 13th Jun 19, 9:04 PM
    • #9
    • 13th Jun 19, 9:04 PM
    I thought that the money laundering checks were designed to make it more difficult to do what is being suggested here? I’ve had to show my passport and prove my residency at a UK address to satisfy a financial services company.
    Last edited by Apodemus; 13-06-2019 at 9:08 PM.
    • Johnnyboy11
    • By Johnnyboy11 14th Jun 19, 6:29 AM
    • 204 Posts
    • 131 Thanks
    Johnnyboy11
    One consideration is whether your savings would be covered by the FSCS.
    • Voyager2002
    • By Voyager2002 14th Jun 19, 8:06 AM
    • 13,311 Posts
    • 9,167 Thanks
    Voyager2002
    It's not for me but someone else and it's Hong Kong. Great for tax so long as you dodge the rubber bullets.
    Originally posted by EdGasketTheSecond

    Hong Kong is a global centre for financial services, so the obvious solution is to open an account there.

    I faced this problem when living in West Africa and finding a way to open a stock trading account was a real hassle. One possible solution would have been to visit Hong Kong and walk into the office of someone like Fidelity there...
    • EdGasketTheSecond
    • By EdGasketTheSecond 15th Sep 19, 4:31 PM
    • 1,255 Posts
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    EdGasketTheSecond
    Hong Kong is a global centre for financial services, so the obvious solution is to open an account there.
    Originally posted by Voyager2002
    Yes he has accounts in Hong Kong. This is for UK money already in the UK but in old accounts with ever dwindling interest rates. He would just like to open a UK share trading account with a UK broker but this does not seem possible without lying about residency.
    • 18cc
    • By 18cc 15th Sep 19, 5:11 PM
    • 1,837 Posts
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    18cc
    They are not going to hang you if you live in the UK, open an account, and then subsequently move abroad and omit to tell them.

    It is different if you deliberately lie on an application form. The definition of doing that is fraud.
    Last edited by 18cc; 15-09-2019 at 5:14 PM.
    • londoninvestor
    • By londoninvestor 15th Sep 19, 5:21 PM
    • 1,335 Posts
    • 1,175 Thanks
    londoninvestor
    However in the UK, it may only be a civil matter, i.e. a breach of trust between you and the service provider whereby you obtain services by deception; ...

    In practice, they would be within their rights to close your accounts but it is not going to be worthwhile them suing you
    Originally posted by bowlhead99
    Can a brokerage firm register a CIFAS marker against you (which would cause a world of pain if you returned to the UK and wanted to open a bank account)? Or is it only banks that use CIFAS?
    • badger09
    • By badger09 16th Sep 19, 11:02 AM
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    badger09
    Yes he has accounts in Hong Kong. This is for UK money already in the UK but in old accounts with ever dwindling interest rates. He would just like to open a UK share trading account with a UK broker but this does not seem possible without lying about residency.
    Originally posted by EdGasketTheSecond
    Interactive Brokers and Saxo used to offer trading accounts to non UK residents. No idea if they still do so.
    • Heedtheadvice
    • By Heedtheadvice 16th Sep 19, 8:43 PM
    • 1,321 Posts
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    Heedtheadvice
    Anti money laundering regs are now quite onerous on financial institutions in the uk.. It is very common that, to comply with them, checks are now made to confirm identity and address information ....in addition to any tax law requirements. There are now lots of data sharing requirements with appropriate authorities making hidden work arounds much less likely to be acceptable or accepted.


    It now makes what you are suggesting doing a lot more difficult, but, like many things not impossible.


    Last time I opened an online account it seemed to be just self certification. Opening another of the same accounts in person was a lot more difficult!!!!
    Did rather seem to defeat the purpose......
    Last edited by Heedtheadvice; 16-09-2019 at 8:46 PM.
    • samuzza
    • By samuzza 17th Sep 19, 12:32 PM
    • 9 Posts
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    samuzza
    I'm searching for a broker who deals with expats too. I'm caught up in the SVS thing, so doing some groundwork just in case.

    I have found one broker who will open an account for me, but it's telephone only (no online platform), and the fees are way higher than the 7.95 per trade that SVS charged. The broker is Redmayne Bentley.

    This is from their FAQs
    "The decision to open an account for a client based in a country outside the UK/EU will be influenced by;
    1) The purpose or reason for the account, i.e. why you want to open an account and the nature of business you expect the account to be used for.
    2) The type of account, e.g. an Individual account, a Company account, a Trust account etc.
    3) Your country of residence or domicile and the level of regulatory and money laundering/terrorist financing controls in place in that country."
    Also, found HSBC expat, which offers a sharedealing account if you have an expat bank account. But their website states

    "Minimum balance requirement: 5,000", then confusingly adds "Eligibility New customers need to hold a minimum of 50,000 (or currency equivalent) in deposits/investments"
    I chatted with someone from HSBC expat, who seemed to by saying I'd need have a cash balance of 50k, or 5k plus at least 45k in their investments, e.g. World Selection Portfolios (which have entry fees of 1% and ongoing charges from 1.32%-1.54% pa). This is before I could use their sharedealing account to invest in the low-cost ETFs I want to.

    Charles-Stanley (not Charles Stanley Direct) said they might be able to help me, but I don't know their fees yet.

    Does anyone know the answer to Johnnyboy11's reply?
    One consideration is whether your savings would be covered by the FSCS.
    Cheers
    Last edited by samuzza; 17-09-2019 at 12:34 PM.
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