Umega manages properties for landlords living all over the world. At last count we have landlords living in 50 different countries. Many of these landlords have been UK residents for a period and have a UK bank account but due to rule changes linked to Brexit, some of these landlords must close their UK bank accounts over the coming year.
Why are UK banks making some overseas landlords close their UK accounts?
With Brexit looming, ‘passporting’ arrangements for UK Banks are changing, meaning that where the banks could previously deal with customers based overseas without having to get authorisation to do so, due to Brexit they will no longer be allowed. The current arrangements are set to end on 31st December 2020 unless a new agreement can be reached with the EU and so from 1st January 2021 each UK bank will have to agree a separate authorisation with each European country it wants to operate in. Some banks have decided it just isn’t worth doing this and so will be closing accounts in countries they no longer choose to operate in.
Which banks are closing accounts?
So far, Lloyds, Halifax and Bank of Scotland plan to close 13,000 accounts in total and Barclaycard will also be closing accounts for those living overseas unless customers have a linked UK residential address. Lloyds are closing accounts for people based in Germany, Ireland, The Netherlands, Portugal and Slovakia and Bank of Scotland are the same, adding Italy to that list. It’s expected that other banks will follow.
What should affected overseas landlords do?
- Approach their bank to establish if it’s possible to appeal the closure. If the landlord has a UK address that can be linked to their account, the bank might be satisfied
- Switch to another bank by checking what other UK banks are operating in the country they live in and have online account opening services. HSBC has an account that can be opened online with no current plans to close accounts for overseas landlords.
- Another option is for landlords to open a local bank account in the country they live in, although this may come with fees for sending funds internationally each month.
Overseas landlords with questions relating to their Edinburgh properties should get in contact with our new landlord team who would be happy to answer any questions.