Specific Bank account for UK property income/ FHL?
Specific Bank account for UK property income/ FHL?
Hello and happy Easter. I have one property which I let as FHL (although from year to hear it migrates to FL depending on length of bookings which sometimes exceed HMRC rules). Have used my HSBC account for incoming payments for around 5 years and disclosed on a number of occasions when querying foreign transfers. They've just told me I cannot continue to do this. I just wondered if anyone else had experienced this or whether people had business accounts for property investment. I've also got 3 standard AST tenants paying in there which they've also said is now not permitted.
No- HSBC- phoned me out of the blue. In part I think I had "regulatory" questions. IE they asked me- such and such payment reference "Rent" what is it. So I did my best at assuring them it was indeed rent or holiday rent. At the end of the call she seemed happy that I was receiving bone fide legal UK funds but said I couldn't use my current account.
I only made the comment about HMRC because sometimes the single property which I let as a holiday let doesn't fulfil the criteria so I enter it on the furnished let bit of the self assessment form.
Just puzzled as to whether banks don't really authorise these payments into current accounts, and wondered what other people do. Thanks
I only made the comment about HMRC because sometimes the single property which I let as a holiday let doesn't fulfil the criteria so I enter it on the furnished let bit of the self assessment form.
Just puzzled as to whether banks don't really authorise these payments into current accounts, and wondered what other people do. Thanks
I suspect it's more to do with corporate greed again and them wanting you to have a business account so that they can charge you for every single transaction in and out and possibly even a monthly fee for managing your account. I used to use my HSBC current account for my FHL and I always wondered if they would query it. Never did, but I no longer use it since they shut my local branch.
Yes, maybe. She didn't seem interested in selling me a property investment account though. Just wanted me not to use HSBC current account. Ive diverted the regular monthly AST rental payments to a Lloyds account and checked with them in branch and they were happy this was OK. Not sure what to do with FHL money but checked with Barclays who said OK. I just wondered what other people did and if anyone else had anything other than just a personal current account. I realise it's different if you're running a hotel type operation or if the properties are in a ltd company, but mine are not.
We have a personal joint bank account with HSBC which we use only for the purpose of our rental income. But that was our choice not theirs.
I know that HSBC are very cautious about receipts of money at their bank from a foreign source, almost to the point of paranoia. This bank was once heavily censured and fined for being careless about receiving laundered money and they haven't forgotten it.
Whether it is true or not I can't be certain, but I have been told that where any HSBC personnel, at whatever level, is found to be responsible for allowing laundered money to come into a customer's account which is under that bank employee's control, then it will be instant dismissal.
I know that HSBC are very cautious about receipts of money at their bank from a foreign source, almost to the point of paranoia. This bank was once heavily censured and fined for being careless about receiving laundered money and they haven't forgotten it.
Whether it is true or not I can't be certain, but I have been told that where any HSBC personnel, at whatever level, is found to be responsible for allowing laundered money to come into a customer's account which is under that bank employee's control, then it will be instant dismissal.
Hi Andrew, thanks for your feedback. I understand the regulatory thing....quite intrusive but the only sort of laundering is in my Miele. Just wondered if anyone else had been "told off" for using their current account, for FHL. I still can't find anything written down which prohibits property investment funds.
Our account for the property is a separate current account with HSBC. They set it up when we bought our first property.
The printed name on the cheque book is "zebedee Flat Account"
I don't get many overseas guests though, and those that do stay often have access to a UK account so I am paid in sterling. (I do hope your posting isn't a warning to expect a phone call from HSBC!)
The printed name on the cheque book is "zebedee Flat Account"
I don't get many overseas guests though, and those that do stay often have access to a UK account so I am paid in sterling. (I do hope your posting isn't a warning to expect a phone call from HSBC!)
Oops- sorry to go thread dead and thanks for all the responses (busy laundering). I think the "global standards" woman in Swansea has maybe been over zealous or got the wrong end of the stick. No-one in my local branch of HSBC knew about these new rules, and they are not applied by other high street banks (yet). I might dig further. FCA say HSBC can define business how they like but have to be *fair* to all customers. I dobbed in hubby to the woman on the phone (for good measure) as he also received FL and FHL income into his HSBC account and hasn't been spoken to strongly by Swansea. (Global Standards hang out in Swansea).
Don't know why they've pulled up my account. I've been using it similarly for 5-10 years. Just applied (and got) M&S credit card which is operated by HSBC. Obs to dress discreetly when on missions!! (not really)
Anyway- I've always had at the back of my mind that banks may insist on property investors having tailored bank accounts- then they could flog us insurance and all sorts.
Don't know why they've pulled up my account. I've been using it similarly for 5-10 years. Just applied (and got) M&S credit card which is operated by HSBC. Obs to dress discreetly when on missions!! (not really)
Anyway- I've always had at the back of my mind that banks may insist on property investors having tailored bank accounts- then they could flog us insurance and all sorts.
It does seem to be the foreign income as Andrew said that got someone's nose twitching. There are no specific rules so it's always down to each bank, each branch etc.
I use standard current accounts but now operate out of two different banks; just not putting all my eggs in one basket effectively! I only receive sterling though.
I use standard current accounts but now operate out of two different banks; just not putting all my eggs in one basket effectively! I only receive sterling though.
[quote]There are no specific rules so it's always down to each bank, each branch etc. [quote]
Yes, interesting.....I was taken aback as I've been using (various) current accounts over (should I divulge) almost 30 years of various sorts of property investment (all in my name). I'm sure I've discussed it at various times with bank managers (when we had those), and have never been "told off".
According to the FCA they're not allowed to have "per branch" rules. They have to treat all customers the same. So unless my global standards woman is wrong, they should be something somewhere written to say that inward coming property investment money is not allowed/ in X-volume/ number/ whatever.
I'm not sure what brought my account to their attention. They asked about all sorts of transactions going back, only a few months. All bone fide and legal but I did get told a firm no to rent money of any sort whether standard AST's or FHL's.
It's not a huge problem for me....just inconvenient.
Yes, interesting.....I was taken aback as I've been using (various) current accounts over (should I divulge) almost 30 years of various sorts of property investment (all in my name). I'm sure I've discussed it at various times with bank managers (when we had those), and have never been "told off".
According to the FCA they're not allowed to have "per branch" rules. They have to treat all customers the same. So unless my global standards woman is wrong, they should be something somewhere written to say that inward coming property investment money is not allowed/ in X-volume/ number/ whatever.
I'm not sure what brought my account to their attention. They asked about all sorts of transactions going back, only a few months. All bone fide and legal but I did get told a firm no to rent money of any sort whether standard AST's or FHL's.
It's not a huge problem for me....just inconvenient.
Just in response to your point about not always meeting the FHL rules - you can apply for a "period of grace" election if the rules were not met, but you genuinely intended to let your property for sufficient days, as long as you met the criteria in the previous year. If you still don't meet the criteria in the next year, you can again use the period of grace election, but by the fourth year of not meeting the criteria, you would need to treat the property as a normal let rather than an FHL.
So effectively this means that you only need to meet the FHL criteria once every three years.ng, still do.
So effectively this means that you only need to meet the FHL criteria once every three years.ng, still do.
Hi!
Back to bank accounts. We use Santander - helpful, supportive and excellent value for money with a Business A/C at £9.50 a month all in, apart from International Bank Transfers which work out at about £30.
Uni.
Back to bank accounts. We use Santander - helpful, supportive and excellent value for money with a Business A/C at £9.50 a month all in, apart from International Bank Transfers which work out at about £30.
Uni.
Rick Bond
If you build it (properly) - people will come.
<a href="http://www.myfavouriteholidaycottages.co.uk">My Favourite Holiday Cottages</a>
<a href="http://www.myholidaymarketing.co.uk">My Holiday Marketing</a>
If you build it (properly) - people will come.
<a href="http://www.myfavouriteholidaycottages.co.uk">My Favourite Holiday Cottages</a>
<a href="http://www.myholidaymarketing.co.uk">My Holiday Marketing</a>
It could be to do with the new international 'exchange of information' rules coming into effect. HSBC may wish to identify foreign source income in order to flag it to the country/ies in which it arises and where no local tax declaration may be being made. I have two accounts with HSBC, one of which receives my sterling holiday rental income but which relates to the finca and is thus Spanish source income, and the other which was formerly my main bank account and received my salary when I was a City wage slave but now receives only the income from my UK BTL. HSBC have no way of knowing that my receipts, in sterling, relate to the rental of a property in Spain which should be declared in Spain. I do declare as it happens, but will only be able to 'red flag' non sterling receipts, and I only accept sterling (to HSBC) or euros (to my Spanish account). Unless you are noted on their records as non-UK resident really it's of no importance to them and someone has misread the rule book. A standard BTL is not a 'business' as it receives no concessions (it's taxed just like investment income) so you should not be required to operate a business account for this income. Theoretically a qualifying FHL is a business and that income is self-employed earnings separated from other personal income. It would be harsh to require this to be paid into a business account though.