Thursday, August 20, 2009

The letter HMRC is sending to the banks

We have obtained a copy of the letter being sent to banks by HMRC seeking information about offshore bank accounts.

It quotes the statutory authority under which the notices are being issued and includes a wide ranging definition of 'account'. This includes holdings of cash, time, notice and demand deposits. It also includes accounts which do not carry interest or any other return. And also any account into which money or investment assets have been deposited, including portfolio asset management accounts, whether managed by the account holder directly or managed bny another or others. So the types of account which will be disclosed include:
  • current account
  • deposit account
  • capital account
  • wealth management account
  • discretionary account
  • alternative investment account
  • property investment account
  • trustee account
  • client account
  • investment trust account
  • bond account
Which accounts will NOT be disclosed by the banks?
The notice states that information and documents related to the following need not be disclosed:
account holders who have authorised exchange of information for the purpose of the EU savings tax directive (or int'l equivalent) - for periods covered by such agreements;
  • accounts where the account holder died more than 4 years ago;
  • accounts where all account holders are PLCs, governments, charities, churches, mutuals, trade associations or clubs
  • ISA accounts
Information to be disclosed by the banks
This is much as you would expect but also includes:
  • Account holder's date of birth
  • Date account was opened
  • Date account was closed (if closed)
  • The account balance at 31 March 2004, 2005.....2009
  • Transaction information for a number of specified periods including
  • - April-June 2004,
  • - First 3 months of operation for accounts opened after 31 March 2004
  • - Jan, Feb and March 2009 for accounts open at 31 March 2009
There were some commentators who thought it unlikely that HMRC would win this fight. The tribunal's confirmation that these letters can be sent to over 300 banks has come at a timely moment given the imminent New Disclosure Opportunity. We have explained more about this in our weekly newsletters.

What do you think about the information being requested and what will happen when the banks get these letters?


  1. Have I understood this correctly? The information being requested from the banks includes (inter alia) all individual account holders who at some time have given a UK address?
    This would include, for example, emigrants from the UK, occasional or long-term non-residents such as UK doms who have spent significant time working abroad and non-doms who have worked at some time in the UK.
    Or have I got it wrong?

  2. I think you've got it right Chris.
    The banks won't necessarily know who has left the UK so can only supply the UK address info they hold.

    In the same way, any non-doms who never notified the bank of their residence in the UK would be excluded from the reports.