2. Which French Bank?
2.2. International Banking & Offshore Banking
Prior to Brexit, UK banks operated in Europe under the EU system, where common rules and the possibility for a financial entity licensed in an EEA country to use its authorisation in other EEA states (the so-called “passport”).
Nevertheless, from 2021 UK banks will have to comply with rules for non-EU firms. These rules can require a national license or the transfer of activities to authorised institutions.
However, national licenses are not available in all EU countries, or provide access only to a limited range of services, and generally do not cover cross-border trade.
As a result, Barclays Bank and Coutts Bank have stated they will no longer offer accounts for UK nationals in Europe and in 2022 Nat West also began closing accounts. Halifax appear to have imposed some restrictions. As for Lloyds Bank they are no longer offering accounts and closing accounts but picture is mixed. Barclaycard also announced in July 2022 they were closing accounts, excluding ISAs. HSBC have stated they will continue. The Cooperative Bank is keeping matters 'under review'. Nationwide is keeping accounts open provided you opened an account whilst resident in the UK.
Whilst the rules do vary, the bank may require a high minimum balance and fees can mount.
If you need to have access to a branch office in France, then HSBC has a presence in most of the major cities.
In May 2016 Barclays bank announced the sale of its branch network and wealth management arm to private equity firm AnaCap.
If you continue to use your UK bank, you can probably open a Euro account alongside your existing home bank account. On this basis, you should be able to withdraw cash from French ATMs using a Euro debit card, without incurring a foreign exchange charge. However, expect to pay a cash withdrawal fee.
Most of the larger UK building societies also offer online based international bank accounts, with more attractive rates of interest and lower fees. Nevertheless, their focus is on savings, rather than day to day banking, so not all will offer a cheque book or international debit/credit card. With some building societies you need a UK postal address before you opened an account, but you would be allowed to keep it when you relocated abroad.
Finally, you may want to consider an offshore bank account, where there is the possibility of being granted a higher degree of privacy over your financial affairs, although this is increasingly now less the case.
There is also less consumer protection offshore than there is available on the mainland, so if you you do take this route you may want to stick to a subsidiary of one of the larger banks.
In addition, particularly in the case of offshore accounts in the UK (Isle of Man, Jersey, Guernsey) you will need to provide plenty of supporting evidence about yourself and your place of residence, banking charges may not be inconsiderable, and interest rates on savings are often less attractive.
With the growth in Tax Information Exchange Agreements between France and some 'tax havens', if you are subject to a tax investigation in France there are limits as to how much you will be able to protect your privacy. There are increasingly, 'no hiding places'.
Indeed, you are legally required by the French tax authorities to declare all foreign bank accounts held by you on your income tax declaration.
The form used for the purpose is Cerfa n°3916, 'Déclaration par un résident d’un compte ouvert hors de France'.
A separate declaration must be used for each account, specifying the name of the account holder, the nature of the account (savings/current), the date it was opened, name and address of the bank, and the account number.
The obligation to declare bank accounts abroad is commonly regarded as a one-off requirement.
However, strictly speaking, the law requires that they be declared each year with your income tax return. If you wish to avoid declaring each year, and the accounts remain unchanged, then best you agree the matter with your local tax office.
If you fail to declare an account you can be fined, and with the growth in bilateral tax agreements with offshore countries there is every prospect that you will eventually be found out, as the following case illustrates - Declaration of Foreign Bank Accounts.
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