Brexit: UK Banks Close British Expat Accounts
Posted by: Stacie Fulford, Client Services Director
A number of British expats living in EU member states have had their UK bank accounts and credit cards closed as a result of rule changes linked to the end of the Brexit transition period on 31 December 2020. This has the potential to impact UK assignees on relocation in an EEA country (all EU member states plus Iceland, Liechtenstein and Norway) with UK bank accounts.
Major banks like Lloyds, Halifax and Barclaycard are among those financial institutions who have sent communications to their customers advising them of the account closures. Additional banks have also indicated that they continue to monitor the situation and may close accounts in the future.
Why are Banks Closing Accounts?
Prior to Brexit, UK financial institutions were able to trade across the EEA because member countries were bound by the same regulatory framework. This arrangement, known as ‘passporting’, will cease on 31 December 2020 once the Brexit transition period ends. While the UK has passed legislation to allow EU banks to continue to provide services for customers in Britain, the EU has not reciprocated. Such an agreement may be reached before the end of the year, although nothing has been announced as yet.
Without a new agreement, from 1 January 2021 UK banks will need direct authorisation from every EEA country they wish to operate in. This requires a costly licence, which many banks have indicated they will not be obtaining. Expats who bank with firms that already own EU-based subsidiaries will most likely have their accounts transferred.
Impact on Assignees
Assignees who are impacted should make their employer and relocation services provider aware of the situation as soon as possible.
Impacted assignees may be able to open an account with a different UK bank. One that continues to operate in EEA member states. However, there is the possibility that the bank they switch to could take the decision to close expatriate accounts at a later date.
Another option would be to open an account with a local bank in the EEA country that the assignee resides in. Although this may impact the ability to receive payments from the UK or could include fee charges to receive payments from a non-EU country.
At Cartus, we continue to monitor the situation closely and will provide updates should they be announced. For more information on specific banks impacted by this, please visit which.co.uk/news/2020/10/thousands-of-british-expats-face-brexit-bank-account-closures-what-to-do-if-youre-affected/
If you would like more information on how Brexit may impact your international mobility programme contact your Cartus representative or email firstname.lastname@example.org.
Source: Which, 8 October 2020