I know that as it can be difficult to open a UK account as a non-resident, or even if a former UK resident wishes to return, it can be a challenge. For these reasons I am sure many people have dormant bank accounts, savings bonds, ISAs etc. that were established before they left the UK. Even if these amounts are very small they are meant to be declared for wealth tax in CH.
My post is to ask how people eventually tidy up these small matters if and when time rolls on and they wake up several decades later in Switzerland even though they thought they might only be here for a year or two…
Has anyone experience of closing these accounts? It is easy to close a bank account, but what if there is a small savings bond, does this trigger a UK tax liability? Or trigger the need to do a UK tax return? I understand that there is no UK capital gains if it is over 20 years old, and I assume it is not ‘income’ either if it stays below the thresholds, but does it trigger a process and other reporting responsibilities in the UK? How does one do this if they have never really done UK taxes, which would be the situation if they left the UK after only several years of adult employment on PAYE, or after University.
In a similar way, if an ISA account has been left dormant for a few decades, how then would it be accessed in the future, maybe easiest via a UK account? Can these even be closed before retirement age? What sort of a reporting mess does this create?
How understanding are the CH authorities if these small matters come up after many years of living here? I assume wealth tax can be calculated in arrears but is there awareness of punitive fines, even if the amounts are small…
Recently closed all our UK accounts as Barclays no longer wanted our business as non UK residents
Not much to it really, transferred all the amounts (ISAs, savings etc) into the main current account and the transferred everything to Revolut via UK bank transfer.
Not much to do about taxes either. For UK side there was nothing to declare but we took ourselves out of Self Assessment. For the Swiss side I declared the closure of the accounts at the end of the year and that was it
P.S. AFAIK in UK you only need to declare taxes if you have income above some threshold (2k annualy)? So even if you have bonds and sell them there is CGT but only applies over a certain amount? For saving accounts your interest is taxed by the bank and the ISAs are not taxed… So unless you are talking lots of money and big interest there shouldn’t be much to worry.
You can also try to get tax advice from a UK accountant… but this is only worth if you have big investments (100k+)
I think you mean an “unused UK account”, not a dormant account: a dormant account is one where the bank has lost all contact with the customer and is no longer active (not possible to receive communication, does not show up in ebanking and staff in branches cannot access); a special (paper) procedure is required to regain access to the funds.
To be honest, unless people have a house, or regular bills to pay in the UK, or receive regular GBP income, there is little benefit to keep an account open after departure long-term. After all, inspite of what you say, it is very easy to reopen an account as a resident once back in the UK.
ISAs etc are advantageous for UK-residents: the profits are tax-free for HRMC, but any interest is tax-free for any non-UK resident anyways, so their benefits evaporate as soon as you leave the UK. Moreover, you are not allowed to add new money to an ISA after departure from the UK. You can close an ISA anytime without penalty.
As for how people “tidy up these small matters”, well, I imagine when they fill in their Swiss tax form for the first time (usually after 5 years, the time taken to get a C permit), they include their accounts for wealth and revenue taxation alongside everything else.
Closing an account does not trigger any UK tax liability as far as I know, usually the bank deals with this directly, or as non-UK-resident you are no longer subject to UK tax rules. Interest is taxed automatically by the bank, unless you have told them that you no longer live in the UK in which case they don’t tax at all.
If these accounts with small balances cause you stress, the best strategy is to simply put aside any nostalgic issues and simply close them.
The only thing to consider is whether you would return to the UK in which case keeping the ISA can be considered as there’s only a limited amount you can put in so if you take a large amount out of an ISA, you won’t be able to put it back quickly (and even if you do, you reduce future ISA capacity).
Many thanks indeed dandi for the reply, apologies for my delay, I had the pleasure of being offline for almost a month!
Thanks blings, yes, I did mean a few accounts that I no longer use, thanks for the advice.
We have UK accounts as we still have a house, therefore mortgage, council tax, utilities, management fees etc to cover. We’ll have to move back there when OH retires. At the moment we are paying 200% council tax as it’s been designated a second home.
We also had 4 business accounts with Santander, they closed them as they were empty and there had been no transactions for over 12 months.
Yep, same for us. No mortgage on the house, but we can’t keep 2 going now husband’s retired. Ours is classed as a long term empty house so we paid 300% this year. Fed up with Barclays crap as they’re still nagging husband so we’ll close that account soon and move it elsewhere.
Is your house in Wales? I know multimillionaires paying less council tax than me at the moment for huge detached houses, one is in a very expensive part of Edinburgh and B listed.
I challenged mines with Fife Council as it’s not a holiday home, OH works remotely from there when we visit Scotland. It also doen’t fall into the bracket of affordable housing, the rent would be about £900 a month plus council tax if it was let. There’s also the subsidence issue, nearly 9 years on owners are still dealing with The Coal Authority and not making much progress, it’s the reason we haven’t sold it. Up to just before the pandemic we couldn’t sell it and agents refused to let it.
After 5 appeals the council told me I’d have to go to a Taxation Tribunal in Edinburgh if I wanted to fight their decision.
I didn’t know Essex were charging up to 300%. I lived in Upminster for 17 years and Hornchurch for 3 years before that, but of course that’s under London Borough of Havering.
Personally I think it’s scandalous, all it’s doing is make people sell up and locals can’t afford the second homes that are coming on the market anyway, Newport in Wales has this going on at the moment which is why I thought your house might have been there. My house isn’t even that big as it’s 2 bedrooms and 2 bathrooms with a tiny scrap of garden to the front and a small terrace at the back plus a parking space, but it’s in a conservation area and therefore a higher council tax bracket. I wouldn’t mind paying 200% if I was actually getting some services for it, but everything in Fife is falling apart whilst they spend money like water on useless vanity projects.
I read the research and report that was done for the Scottish Government regarding council tax, the authors seemed to have the idea if you had to work away but still maintained a house in Scotland you were somehow mega rich so should be penalised!