When buying holiday money or sending money abroad, many banks and brokers include hidden fees and or a mark-up in the exchange rate.  Not surprising, a recent study into international money transfers and payments found that 75% of consumers do not know about, or do not understand currency exchange rate mark-ups.

In recent years specialised currency exchange companies have broken the monopoly on the supply of currency exchange services.  Banks and high street exchanges are no longer the go to choice for changing currency.

These currency exchange companies deliver much more competitive exchange rates to consumers, more personalised service, and faster transfer times than banks offer. It’s no surprise than savvy overseas property buyers and expats choose these companies to get a better deal.

A high street bank may seem like the easy or convenient option, and may be your choice through habit, however using a specialist foreign currency exchange provider is just as easy and more importantly works out much cheaper!

ISA’s are very tax efficient ways to save or invest, as you pay no tax on savings interest, (not that you get any these days), and virtually no tax on investment returns. They are therefore usually the first type of saving or investment account that people will have.  For this reason, and the fact that there is a generous annual allowance to save into them, you like many other may have built up sizeable amounts in ISA’s.

You may also have reached, or be approaching retirement, and relying on this tax efficient ISA nest egg, to provide extra income to supplement your pension.  For some, an ISA may even be their ‘pension’.

ISA’s and moving to Spain

So if you’re moving, or have moved to Spain, can you keep your ISA?  The short answer is yes.  According to gov.uk:

If you open an Individual Savings Account (ISA) in the UK and then move abroad, you can’t put money into it after the tax year that you move (unless you’re a Crown employee working overseas or their spouse or civil partner).

You must tell your ISA provider as soon as you stop being a UK resident.

However, you can keep your ISA open and you’ll still get UK tax relief on money and investments held in it.

You can pay into your ISA again if you return and become a UK resident 

Great – you can keep your ISA, and continue to benefit from it’s tax efficiency!  Well not exactly.  When you move from the UK to Spain, you also move from the UK tax system to Spain’s tax system.  So you will continue to get UK tax relief, however your ISA will (or should), get Spanish tax treatment.

The UK press and expat papers in Spain have all carried articles warning that thousands of Brits living in the EU will have their UK bank accounts closed by the end of the year.

In the UK the The Daily Mail, The Guardian, The Times and The Daily Telegraph to name a few, have all detailed how banks including Lloyds, Barclays and even the Queen’s bankers Coutts, will be closing expat accounts and withdrawing services.  The reason for this is the UK’s failure to agree a post-Brexit trade deal to allow cross border Financial Services to continue.

Banks are having to make decisions as to which EU countries to pull out of and which to continue operating in.

The bank, which is Britain’s biggest banking group, started writing to its customers living in these countries since August, telling them that their UK bank accounts would be shut on December 31.

Barclays also confirmed that its banking and credit-card customers living in the EU had started receiving letters.

Why Are UK Banks Closing Accounts & Withdrawing Services for Brits Living in the EU?

The Real Decreto – ley 1/2017, de 20 de enero, implemented measures to help consumers to reclaim money overpaid due to a ‘clausula suelo‘, (floor clause) in their mortgages (hipotecas) was approved on 20/01/2017.  This law dictates that banks must:

a) Allow their customers to reclaim their money without going to court, and inform their customers how to do so.

b) On receipt of a claim from a customer, make an offer to pay back money over paid plus interest.

c) If the customer accepts the offer, pay the amount offered back to the customer.

The maximum period for the consumer and the entity to reach an agreement is three months from the submission of the claim, and it will be understood that the out of court procedure has been concluded without agreement, allowing the customer to try and claim the money back via the courts, if either the:

• bank rejects the clients request.
• term of three months passes without any communication from the bank.
• customer does not agree with the calculation of the amount to be returned by the bank and rejects the offer.
• bank hasn’t made an offer within 3 months of the reclamation.

Most banks have already removed the ‘clausula suelo’ from their mortgages, so in most cases claims submitted will simply be for a refund of over-payments. For other banks that have not yet removed the clause, the process will be the same, however the claim will include a request to have the clause removed, as well as claim for a refund of over-payments.

Whichever bank you are with, the starting point of any possible ‘clausula suelo’ claim, is knowing whether or not your mortgage contract has this clause hidden in it. Santander, BBVA, ING, Cajamar, Caja Sur, Bank Inter, EVO, ABANCA, and Banco Popular, have all done away with the clause in their mortgages, so if you are with any of these banks, you should already have been notified about it, and following this new legislation, in time, everyone whose mortgage is affected, should also hear from their bank.

You don’t need to wait to hear from your bank.  There are plenty of lawyers offering to take up ‘clausula suelo’ claims, many on a no win no fee basis, because they know that they’ll win. This might seem attractive to begin with, however their success fee will typically be a hefty percentage, often half or more of any refund that they obtain from the bank.

We can help you save on unnecessary legal costs and expenses, first by providing a free assessment of your case, and then if we determine that you have a valid ‘clausula suelo’ claim, we offer a comparitively low cost assistance service to prepare, present and manage your ‘clausula suelo’ claim.