British expats face banking crisis as Brexit looms
Britons living overseas could lose access to bank services after the transition period.
17th November 2020 14:32
by Marc Shoffman from interactive investor
Britons living overseas could lose access to bank accounts and investments after the transition period ends.
British expats with UK banks could face having to move or sell investments as Brexit approaches, as their providers may be unable to deal with them.
Many banks are warning expats that they may no longer have access to their accounts or wealth management services after the Brexit transition period ends on 31 December.
This is because UK financial services firms currently operate under European Union (EU) rules that let them ‘passport’ their services across the trading bloc.
But if there is no trade deal or clarity on how banks can operate in the next few months, expats could be left without access to these services. UK banks and wealth managers would be unable to operate in an EU country unless they are regulated in it.
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The Financial Conduct Authority regulator has urged providers to contact customers in a “timely and supportive manner” and help with winding down and transferring funds.
Barclays Wealth Management has already told expats living in the EU that accounts will be closed if a UK residential address cannot be provided, with some reporting they have been given until 4 December.
Coutts and Lloyds Banking Group have also told customers living in the EU that their accounts will be closed.
This also includes current accounts, which means expats with a pension paid into a UK account may need to open one locally.
Expats are being advised to seek alternative providers but to ensure they are regulated.
Blacktower Financial Management has suggested expats check with their bank and review their options quickly, while also considering any tax charges that may come from having to sell investments.
It said: “While selling your assets may seem like the quickest solution in a very narrow timeframe, do try to refrain from a knee jerk reaction and any rash choices.
“The decision to liquidate should not be taken lightly, and especially should not be determined by a deadline beyond your control.
“There may also be tax implications if you are selling any assets, so it is important to seek advice from a taxation specialist or accountant should you decide to pursue this.”
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Blacktower also suggests this could be a good opportunity to review your investment goals and how your portfolio is performing.
Jeremy Mugridge, head of marketing for wealth manager Quilter, says its international service will continue.
He adds:
“There isn’t long left to prepare for the eventualities of Brexit so it is important to act swiftly to prevent any problems developing down the line.”
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