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Resident/Non Resident Bank Account

Resident/Non Resident Bank Account

Old May 16th 2008, 2:23 pm
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Default Resident/Non Resident Bank Account

We found out a few months ago that our bank account is a non-resident one.

We have been residents here for nearly four years, but opened the bank account a year before this. At the time we didn't relise there were different bank accounts (and in fact have only JUST realised because the person serving us in the bank told us).

She advised us to have it converted to a Resident's accout but had not got the time to do it there and then.

What difference will it make? At the moment we don't pay any charges at all although I think there may be a small annual fee.

Do we have the otption of leaving it as it is? And would it be more or less beneficial to us to do so?

(I've a feeling this is going to be one of those questions I wished I had not asked....).
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Old May 16th 2008, 3:55 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by scampicat View Post
We found out a few months ago that our bank account is a non-resident one.

We have been residents here for nearly four years, but opened the bank account a year before this. At the time we didn't relise there were different bank accounts (and in fact have only JUST realised because the person serving us in the bank told us).

She advised us to have it converted to a Resident's accout but had not got the time to do it there and then.

What difference will it make? At the moment we don't pay any charges at all although I think there may be a small annual fee.

Do we have the otption of leaving it as it is? And would it be more or less beneficial to us to do so?

(I've a feeling this is going to be one of those questions I wished I had not asked....).
Different answers according to the bank probably. We changed ours on the advise of our gestor. I think the difference for us was no interest on non-residents account and interest on the residents account but not totally sure about that.

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Old May 16th 2008, 4:36 pm
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Default Re: Resident/Non Resident Bank Account

To all intents and purposes a resident's account and a non resident's account are the same.

The only significant difference is that if you have a resident's account which generates interest (you should be so lucky!) then tax at 18% will be deducted. On an interest bearing non resident's account the interest is paid gross.

As a resident you are not allowed to have a non resident account but as it makes so little difference most banks don't seem to worry about it.
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Old May 16th 2008, 4:38 pm
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Default Re: Resident/Non Resident Bank Account

... and in fact, having asked the Halifax to change ours to RESIDENT, after 1 year and many, many emails/phone calls they have still failed to do this!

Whereas the Banesto bank did it straight away whilst I waited.
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Old May 16th 2008, 8:37 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by Fred James View Post
To all intents and purposes a resident's account and a non resident's account are the same.

The only significant difference is that if you have a resident's account which generates interest (you should be so lucky!) then tax at 18% will be deducted. On an interest bearing non resident's account the interest is paid gross.

As a resident you are not allowed to have a non resident account but as it makes so little difference most banks don't seem to worry about it.
Right, thanks everyone.

We don't get any interest.
Therefore it seems we need only change it as and when we feel inclined.

(It is Caja Granada by the way).
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Old May 16th 2008, 8:47 pm
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Default Re: Resident/Non Resident Bank Account

I know of people who had their non-resident account frozen when the bank realised they were actually resident. In your case, probably not likely after all this time!
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Old May 17th 2008, 7:32 am
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Default Re: Resident/Non Resident Bank Account

Strangely enough (even though they haven't changed my account), the Halifax told me that if it was discovered that I had a non-resident account whilst being a resident, the police would freeze the account pending an enquiry and court case!!!!!

So why won't they change it???
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Old May 17th 2008, 9:44 am
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Default Re: Resident/Non Resident Bank Account

Every two years the bank is supposed to get the account holder if NON Resident to sign a declaration stating that they are indeed Non Resident. This is according to Spanish Law 41/1998 Non resident Taxpayers Income Tax and Ancillary Fiscal Regulations.
I have a HALIFAX account and am Non resident and recently received the notification letter from Halifax Madrid.
The last paragraph says;
"Please be aware that in accordance with the current legislation the declaration must be returned within the next two months following this notification, otherwise Banco Halifax Hispania will be obliged to apply a 18% witholding tax on the interest paid in your account. Therefore to avoid any inconvenience please return the forms as soon as possible"

The reasons for the Resident or Non resident status must be purely to do with ensuring that tax is applied/collected in the country it belongs to. The UK fiscal authorities at HM Revenue & Customs had a 'crack down' on Off Shore bank accounts belonging to UK residents last year. Apparently £5,000,000,000 of tax belonging to UK has been 'unpaid' over the years. Last summer the authorities in UK gave everyone a chance to 'come clean' over their tax affairs and avoid draconian penalties.
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Old May 17th 2008, 2:27 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by Nige View Post
Every two years the bank is supposed to get the account holder if NON Resident to sign a declaration stating that they are indeed Non Resident. This is according to Spanish Law 41/1998 Non resident Taxpayers Income Tax and Ancillary Fiscal Regulations.
I have a HALIFAX account and am Non resident and recently received the notification letter from Halifax Madrid.
The last paragraph says;
"Please be aware that in accordance with the current legislation the declaration must be returned within the next two months following this notification, otherwise Banco Halifax Hispania will be obliged to apply a 18% witholding tax on the interest paid in your account. Therefore to avoid any inconvenience please return the forms as soon as possible"

The reasons for the Resident or Non resident status must be purely to do with ensuring that tax is applied/collected in the country it belongs to. The UK fiscal authorities at HM Revenue & Customs had a 'crack down' on Off Shore bank accounts belonging to UK residents last year. Apparently £5,000,000,000 of tax belonging to UK has been 'unpaid' over the years. Last summer the authorities in UK gave everyone a chance to 'come clean' over their tax affairs and avoid draconian penalties.
We had similar letters, but 18% of a couple of €`s is no big deal and you have proof the tax has been paid. ;-))
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Old May 17th 2008, 11:34 pm
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Default Re: Resident/Non Resident Bank Account

If you are resident for more than 183 days the you become a fiscal resident [ ie you pay your taxes!!!] Even though you sign the declaration once you obtain residencia status you become a fiscal resident and as such your bank account will be frozen. Dont panic as this means you cannot pay anything into your account but can continue with Standing Orders and other outgoings without hinderence.
Halifax Espania informed me when I called in to draw a lump sum out and I was told that the next time I go to the bank I was to take both our passports [joint account] and copies of our residencia. They would then close the old account [foreigners account] and set up a new account for fiscal depositors. I gather I will then pay tax on the interest incurred on our account.
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Old May 17th 2008, 11:41 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by keddyboy View Post
If you are resident for more than 183 days the you become a fiscal resident [ ie you pay your taxes!!!] Even though you sign the declaration once you obtain residencia status you become a fiscal resident and as such your bank account will be frozen. Dont panic as this means you cannot pay anything into your account but can continue with Standing Orders and other outgoings without hinderence.
Halifax Espania informed me when I called in to draw a lump sum out and I was told that the next time I go to the bank I was to take both our passports [joint account] and copies of our residencia. They would then close the old account [foreigners account] and set up a new account for fiscal depositors. I gather I will then pay tax on the interest incurred on our account.
We just had a certificate from the bank advising what tha average balance was over the year, for wealth tax purposes I guess. Ours is still non resident, although at last the bank have agreed to change it now
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Old May 18th 2008, 12:07 am
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Default Re: Resident/Non Resident Bank Account

Our bank changed us from non resident to resident without us knowing they were doing this, but they forgot to change our direct debits over meaning none of them got paid:curse:

We were given a new account completely new number which now does not match the number on the cheque book but they won't change the check book, still have never used it in 5 years so I don't expect I will now. Oh the other thing when they changed us over, we were not resident but they still did it.

The two accounts ran side by side, money going into new account, bills being paid from old account...........NO MONEY IN OLD ACCOUNT It was only when we checked at the end of the month that we realised something was wrong, it was a nightmare trying to get them to agree to change the direct debit over from one account to the other.
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Old Aug 31st 2008, 12:26 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by jdr View Post
We had similar letters, but 18% of a couple of €`s is no big deal and you have proof the tax has been paid. ;-))
I have just completed the Form sent by the Halifax regarding myself being a non resident. At the bottom of the form it asks for the taxpayers representative information. I do not have a representative, do i need one. ?

Is this somthing to do with having Fiscal representation, if so, do i need a soliciter to act on my behalf.

Many Thanks,
Steve
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Old Aug 31st 2008, 12:45 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by SteveR View Post
I have just completed the Form sent by the Halifax regarding myself being a non resident. At the bottom of the form it asks for the taxpayers representative information. I do not have a representative, do i need one. ?

Is this somthing to do with having Fiscal representation, if so, do i need a soliciter to act on my behalf.

Many Thanks,
Steve
No, you don't need one unless your financial affairs are in the slightest complicated.

I would think that most ex-pats with a second home in Spain don't need an FA.
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Old Aug 31st 2008, 1:23 pm
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Default Re: Resident/Non Resident Bank Account

Originally Posted by snikpoh View Post
No, you don't need one unless your financial affairs are in the slightest complicated.

I would think that most ex-pats with a second home in Spain don't need an FA.
Thanks for your help,
Steve
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