# Selling Uk house - shelter proceeds from creditors



## Jimmy (May 19, 2017)

Hi,

Have a friend selling a house in UK. He wants to keep the proceeds over there in maybe a bank account and gift to relatives vs in Canada to shelter assets from some potential business partner and creditor issues. The sale will be through an agent and expect on the sale he will get a bank draft.

1) What would be the best way to hold the $ over there? Create a UK savings account? Can this be done easily? He has relatives in the UK and they could put it in a safety deposit box but it wouldn't earn interest.

2) If in an investment acct, there will be foreign interest earned. Can this just be reported on a Cdn tax return? 

Any ideas would be great. Thanks.


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## Longtimeago (Aug 8, 2018)

Tell him to pay his creditors like a real man would. What is the right thing to do does not depend on borders, it depends on morality and whether someone has any honour or not.

It is also against forum rules to ask for advice on doing something that is illegal. Hiding money from creditors is illegal.


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## Saniokca (Sep 5, 2009)

Longtimeago said:


> Tell him to pay his creditors like a real man would. What is the right thing to do does not depend on borders, it depends on morality and whether someone has any honour or not.
> 
> It is also against forum rules to ask for advice on doing something that is illegal. Hiding money from creditors is illegal.


He's trying to shelter, not hide  It's now always black and white - don't corps do it all the time in bankruptcies?

P.S. Isn't RRSP money protected in bankruptcy in most cases? That's a shelter of sorts then.


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## Jimmy (May 19, 2017)

Longtimeago said:


> Tell him to pay his creditors like a real man would. What is the right thing to do does not depend on borders, it depends on morality and whether someone has any honour or not.
> 
> It is also against forum rules to ask for advice on doing something that is illegal. Hiding money from creditors is illegal.


 It is a hypothetical situation and you are the only one talking about illegalities so spare me the sanctimony while you avoid tax w your RRSPs and take adv of every credit available lol. 

It is his partners that may have the issues and all he may want to do is shelter some of his personal assets legally in the event of bankruptcy.


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## Longtimeago (Aug 8, 2018)

Jimmy said:


> It is a hypothetical situation and you are the only one talking about illegalities so spare me the sanctimony while you avoid tax w your RRSPs and take adv of every credit available lol.
> 
> It is his partners that may have the issues and all he may want to do is shelter some of his personal assets legally in the event of bankruptcy.


I think, "to shelter assets from some potential business partner and creditor issues", is pretty clear. What reason would anyone have to HIDE assets from a creditor other than to not pay that creditor what was owed?

As for anyone including myself avoiding taxes, what is the relevance of that? Perhaps you are not aware of the difference between tax 'avoidance' and tax 'evasion'. The first is legal while the second is illegal and immoral . An RRSP simply delays taxation to a later date when hopefully the amount of tax to be paid will be less, it does not 'evade' taxation. So lol your way past your irrelevant comparison.

Now you clarify that this is to hide assets in case of a bankruptcy. What issues do you think it is that his partners would have in that case, that are relevant? Could it be that there assets will be used to pay creditors while his are not if he hides them? Yeah, as a partner I would have an 'issue' with him doing that and leaving me holding the bag. What about the creditors? Suddenly they have disappeared from your writing. Will there be none left unpaid? The only reason to hide assets before a bankruptcy is to avoid having to use that asset to provide funds to pay creditors. Or can you tell me another reason to hide assets before a bankruptcy?

There are ways to hide assets that are legal but doing so ethically is an entirely different issue. If you owe money, you pay it, that's the ethical thing to do, whether it hurts you financially to do so or not.


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## Longtimeago (Aug 8, 2018)

Saniokca said:


> He's trying to shelter, not hide  It's now always black and white - don't corps do it all the time in bankruptcies?
> 
> P.S. Isn't RRSP money protected in bankruptcy in most cases? That's a shelter of sorts then.


Yes, corporations do it all the time Saniokca. Have you ever met a corporation with morality used as part of their decision making?

Yes, RRSP money is protected in bankruptcy. Now let's say you owe me $1000 and you file for bankruptcy. You then don't pay me the $1000 you owe me even though you have money sitting in an RRSP. Will you be happy to look me in the eye and say, 'tough luck guy, your lose, not mine.' 

I was brought up to know that a man(or woman, I happen to be a man) is only as good as his word. When you contract a debt, there is an implied promise that you will pay that debt. You've given your 'word' on it and I was taught that your word is your promise is your bond is your honour. A man without honour is not a man. It's as simple as that.

So when someone hides something in order to not pay what they owe, what then are they? I know things like honour and keeping promises are not considered as mattering by many people these days and that is up to them. But it does not change that if their word means little to them, what they are is quite clear to me.

If you owe a debt, you pay it unless you do not have $1 left to your name and even then, you pay it as and when you can in the future until that debt has been fully paid. The ONLY circumstance under which you do not pay your debt is if you die.


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## Jimmy (May 19, 2017)

Longtimeago said:


> I think, "to shelter assets from some potential business partner and creditor issues", is pretty clear. What reason would anyone have to HIDE assets from a creditor other than to not pay that creditor what was owed?
> 
> As for anyone including myself avoiding taxes, what is the relevance of that? Perhaps you are not aware of the difference between tax 'avoidance' and tax 'evasion'. The first is legal while the second is illegal and immoral . An RRSP simply delays taxation to a later date when hopefully the amount of tax to be paid will be less, it does not 'evade' taxation. So lol your way past your irrelevant comparison.
> 
> ...


You are being misleading and obtuse. I said 'SHELTER' You are the only one using the word HIDE and illegal. Again this is just a hypothetical to lower risk and prevent against the possibility of a FUTURE event . What part of 'potential ' do you not understand? . There is nothing illegal or immoral as you claim about selling some personal assets to minimize the risk of the possibility of a bankruptcy in the next few years. Again it may be his partner's future creditors not his current creditors. Hope it sinks in finally

And this is the same concept as a tax avoidance whether you can comprehend it or not either. 

The whole pt of this thread was to get answers to 1) and 2) not engage in some misguided debate about legalities so we'll leave it at that.


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## bgc_fan (Apr 5, 2009)

Jimmy said:


> Hi,
> 
> Have a friend selling a house in UK. He wants to keep the proceeds over there in maybe a bank account vs in Canada to shelter assets from some potential business partner and creditor issues. The sale will be through an agent and expect on the sale he will get a bank draft.
> 
> ...


Can't really say much on the details, but I would question what type of formal partnership is in place. If it is limited liability, I would assume that creditors going after one of the partners, shouldn't be able to go after the others. From what you are presenting, that seems to be the concern.

As for point 2, I assume he has been declaring the property the whole time that he held it on the CRA return? IIRC there is a checkbox for foreign property for property over $100k Cdn.


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## Jimmy (May 19, 2017)

bgc_fan said:


> Can't really say much on the details, but I would question what type of formal partnership is in place. If it is limited liability, I would assume that creditors going after one of the partners, shouldn't be able to go after the others. From what you are presenting, that seems to be the concern.
> 
> As for point 2, I assume he has been declaring the property the whole time that he held it on the CRA return? IIRC there is a checkbox for foreign property for property over $100k Cdn.


Thanks. He may want to sell the house. He just wants ideas on maybe setting up a bank acct in the UK to likely gift the $ to family.


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## Longtimeago (Aug 8, 2018)

Jimmy said:


> Thanks. He may want to sell the house. He just wants ideas on maybe setting up a bank acct in the UK to likely gift the $ to family.


And the picture changes again. Now he 'may want' while yesterday he was 'selling'. Now he is 'likely' to gift the $ to family while yesterday he was hiding assets from creditors.

Call it anything you want but it doesn't change what you first wrote he wanted to do. Which part of owing money to a creditor and then not paying it in the event of a bankruptcy do YOU not understand Jimmy? I think my understanding is 100% If creditors are owed money and he is liable to those creditors, with or without partners, it is the same. If he does not owe any creditors money he has nothing to hide from them or from his partners.

I am not being obtuse but do wonder if you are being deliberately obtuse.


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## humble_pie (Jun 7, 2009)

Jimmy said:


> Thanks. He may want to sell the house. He just wants ideas on maybe setting up a bank acct in the UK




if the "friend" owns a house in the UK, also has business partners in the UK, also has family in the UK, then he should know exactly what to do

any party who already owns a house or any other form of real estate in the UK is 99.99% likely to already have one or several british bank accounts

wondering why the "friend" doesn't go over to great britain & settle his affairs himself


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## Mukhang pera (Feb 26, 2016)

hp's comments reflect what I was thinking.

I have owned houses in two countries besides Canada. In each case, there were always house-associated bills to pay and a local bank account was pretty much a _sine qua non_ of getting things done. All the more necessary if the house has been generating rents.

Seems odd that this UK homeowner (and apparently a person with some UK business interests) has to have a "friend" cast about on the web for what should be fairly basic information to one who already owns real estate there.


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## Longtimeago (Aug 8, 2018)

Oh there is little doubt there is more to the story than meets the eye. No doubt that's why the story keeps changing, he's selling then no he's thinking of selling. He's concerned about creditors and hiding the asset then no, he's thinking of gifting relatives.

But I can think of a scenario where someone could own a home in another country and not have a bank account guys. Use your imagination, a relative died and left it to him. Maybe that will get incorporated into the story next. LOL

Speaking of moral issues Mukhang pera, whatever happened to that women you met who had married a guy you knew just so she could get residency in Canada? Still around or did she get deported?


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## Jimmy (May 19, 2017)

Longtimeago said:


> And the picture changes again. Now he 'may want' while yesterday he was 'selling'. Now he is 'likely' to gift the $ to family while yesterday he was hiding assets from creditors.
> 
> Call it anything you want but it doesn't change what you first wrote he wanted to do. Which part of owing money to a creditor and then not paying it in the event of a bankruptcy do YOU not understand Jimmy? I think my understanding is 100% If creditors are owed money and he is liable to those creditors, with or without partners, it is the same. If he does not owe any creditors money he has nothing to hide from them or from his partners.
> 
> I am not being obtuse but do wonder if you are being deliberately obtuse.


Now you are being obtuse and delusional. He was never 'hiding' anything from anyone. That was in your little head w nothing else apparently. I said 'potential'. I also told you 2x this is HYPOTHETICAL so if he is selling or maybe selling is irrelevant.

If you sell an asset years before a potential issue you aren't 'hiding' anything either so give the OCD about creditors a rest too.

Either way I could care less about your delusions about legal issues.


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## Jimmy (May 19, 2017)

humble_pie said:


> if the "friend" owns a house in the UK, also has business partners in the UK, also has family in the UK, then he should know exactly what to do
> 
> any party who already owns a house or any other form of real estate in the UK is 99.99% likely to already have one or several british bank accounts
> 
> wondering why the "friend" doesn't go over to great britain & settle his affairs himself


Never said his business partners were in the UK Your wrong assumption.


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## Jimmy (May 19, 2017)

Mukhang pera said:


> hp's comments reflect what I was thinking.
> 
> I have owned houses in two countries besides Canada. In each case, there were always house-associated bills to pay and a local bank account was pretty much a _sine qua non_ of getting things done. All the more necessary if the house has been generating rents.
> 
> Seems odd that this UK homeowner (and apparently a person with some UK business interests) has to have a "friend" cast about on the web for what should be fairly basic information to one who already owns real estate there.


None of that is the case. Lots of confusion here. Never mind I'll just google how a UK bank acct may be opened from Canada as noone else seems to have any ideas.


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## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> Speaking of moral issues Mukhang pera, whatever happened to that women you met who had married a guy you knew just so she could get residency in Canada? Still around or did she get deported?


Still around. The majority CMF view seemed to be that it was a matter of little moment and should be overlooked.

She's a credit to Canada. She asked the guy who built our house to travel to San Diego to do some renovation work on 2 condos she owns there. So, he purchased here and loaded on his truck most of the material required and drove there and offloaded. The job was to take about 2 weeks. About one week into the job, she picked a fight with him, told him to pack his tools and clear out. He did. He was paid not one dime for his materials, his travel time and cost, or his labour. But, I suppose that too should be overlooked in the name of neighbourliness.


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## Mukhang pera (Feb 26, 2016)

Jimmy said:


> None of that is the case. Lots of confusion here. Never mind I'll just google how to open a UK bank acct from Canada as noone else seems to have any ideas.


Well, maybe just me, but if the question is as simple as how to open a UK bank account, why not ask a UK bank? Such an institution just might have an idea.


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## humble_pie (Jun 7, 2009)

Jimmy said:


> None of those conditions are the case.



they are, precisely & exactly, the case

see your own posts

a "friend" owns a house in the UK, you said
he has partners in the UK, you said
he has relatives in the UK, you said

not for one second could a person in the above circumstances ever require "advice" from a canadian "friend" about how to open a bank account in the UK


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## Jimmy (May 19, 2017)

Mukhang pera said:


> Well, maybe just me, but if the question is as simple as how to open a UK bank account, why not ask a UK bank? Such an institution just might have an idea.


It wasn't. Was hoping someone here might have opened an acct in UK from here and have some helpful advice on that and the other questions I had. Unfortunately not


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## Jimmy (May 19, 2017)

humble_pie said:


> they are, precisely & exactly, the case
> 
> see your own posts
> 
> ...


Sorry for your confusion. I never said he had partners in UK. You 'assumed ' that. I thought the 'over there' reference would have been enough to indicate he was Canadian but I guess not.


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## humble_pie (Jun 7, 2009)

Jimmy said:


> Sorry you can't read or comprehend properly. I never said he had partners in UK. You 'assumed ' that. I thought the 'over there' reference would have been enough to indicate he was Canadian but I guess not.




no one cares where his creditors are. As MP pointed out, it's near impossible to own a "house in UK" without having a UK based bank account to operate said property ... 

as specified, the house your "friend" is preparing to sell is said to be located in great britain. In addition, the "friend" has relatives in the UK who are, apparently, willing to store valuables in a safety deposit box for him ...

all this begs the question, Why doesn't the "friend" visit the UK & settle his affairs himself

alas a cmffer who doesn't know whether offshore income should be reported to the CRA or not is perhaps not a suitable "advisor" in this case 




Jimmy said:


> Have a friend selling a house in UK. He wants to keep the proceeds over there in maybe a bank account and gift to relatives vs in Canada to shelter assets from some potential business partner and creditor issues. The sale will be through an agent and expect on the sale he will get a bank draft.
> 
> 1) What would be the best way to hold the $ over there? Create a UK savings account? Can this be done easily? He has relatives in the UK and they could put it in a safety deposit box but it wouldn't earn interest.
> 
> 2) If in an investment acct, there will be foreign interest earned. Can this just be reported on a Cdn tax return?


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## Jimmy (May 19, 2017)

humble_pie said:


> no one cares where his creditors are. As MP pointed out, it's near impossible to own a "house in UK" without having a UK based bank account to operate said property ...
> 
> as specified, the house your "friend" is preparing to sell is said to be located in great britain. In addition, the "friend" has relatives in the UK who are, apparently, willing to store valuables in a safety deposit box for him ...
> 
> ...


You don't have to have a UK bank acct to own a house there so you are ignorant in that area. You could have the title transferred to you by someone else for one. 2) You can't read either apparently. I was asking if the interest could 'just' be reported on a cdn return (vs maybe filing a UK return too) not whether it should be reported at all. But hey you learned something lol


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## OhGreatGuru (May 24, 2009)

This whole thread has taken a kind of ugly turn over a lack of clarity regarding the nature of the potential creditors and potential "business partner" issues.

Jimmy, if your "friend" is legally liable in Canada for debts to creditors or business partners; and is legally required to use personal assets to pay (as opposed to some corporate protection); it doesn't matter, legally, if some of his assets are overseas. His creditors can still go after those assets. Keeping them overseas makes them harder to find, but doesn't change his legal liability. So you aren't going to get any constructive advice here on how to "shelter" them. Because it would amount to advice on how to "hide" assets, not "shelter" them.


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## humble_pie (Jun 7, 2009)

Jimmy said:


> You don't have to have a UK bank acct to own a house there so you are ignorant in that area. You could have the title transferred to you by someone else for one.


in such a case - for example in the case of an inherited property - the solicitors involved in the transfer would be delighted to assist the new owner to open a bank account. British solicitors excel at introductions.





> You can't read either apparently. I was asking if the interest could 'just' be reported on a cdn return (vs maybe filing a UK return too) not whether it should be reported at all.


i read excellently well, thank you. What i read is that a novice in this bilateral jurisdiction taxation zone should not be offering "advice" to anyone.





> But hey you learned something lol


alas what we are learning is that this case does seem to get a little bit dodgier every time you post .each:


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## Jimmy (May 19, 2017)

humble_pie said:


> in such a case - for example in the case of an inherited property - the solicitors involved in the transfer would be delighted to assist the new owner to open a bank account. British solicitors excel at introductions.
> i read excellently well, thank you. What i read is that a novice in this bilateral jurisdiction taxation zone should not be offering "advice" to anyone.
> alas what we are learning is that this case does seem to get a little bit dodgier every time you post .each:


Despite your blather solicitors can still transfer the title w out a bank acct. And you couldn't or wouldn't read properly - deflecting wont help. Not taking any advice either from someone who is only capable of useless banter.


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## Jimmy (May 19, 2017)

OhGreatGuru said:


> This whole thread has taken a kind of ugly turn over a lack of clarity regarding the nature of the potential creditors and potential "business partner" issues.
> 
> Jimmy, if your "friend" is legally liable in Canada for debts to creditors or business partners; and is legally required to use personal assets to pay (as opposed to some corporate protection); it doesn't matter, legally, if some of his assets are overseas. His creditors can still go after those assets. Keeping them overseas makes them harder to find, but doesn't change his legal liability. So you aren't going to get any constructive advice here on how to "shelter" them. Because it would amount to advice on how to "hide" assets, not "shelter" them.


He isn't and that wasn't the purpose of this thread at all as was explained repetitively to others. There are no creditor issues. It is just a scenario that there maybe potential issues. Maybe I should have been more clear and said he wants to sell an asset now to avoid it being part of a potential liability claim 3 yrs down the road and avoided all this useless debate. Part is a little lack of clarity. Most is others only obsessed about legal issues based on their misreadings and guesswork.

Either way no pt deliberating on this any further.


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## Eclectic12 (Oct 20, 2010)

Maybe it's me ... but with the question about reporting foreign interest from an investment account on a Canadian tax return, it seems that Canadian taxes on foreign assets is another area that your friend has to consider.

For #1 ... no idea though posts about opening a Canadian bank account while resident of another country or similar have indicated it can be problematic. As there are UK relatives who presumably can ask locally, IMO that would be a good starting point.

For #2 ... assuming only interest is paid in the UK investment account, I would expect so. Of course, should it be other types of income then other types of taxes will come into play. Either way, likely there are UK withholding taxes to pay, in addition to reporting on the Canadian tax return.


The other question is whether the house being sold in the UK qualifies for the principal residence exemption. If not, there may be two countries to report/pay capital gains taxes.


Not to helpful ... but it is what it is.


Cheers


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## Longtimeago (Aug 8, 2018)

Jimmy said:


> None of that is the case. Lots of confusion here. Never mind I'll just google how a UK bank acct may be opened from Canada as noone else seems to have any ideas.


Actually Jimmy I can answer that simple question. But yes, so can Google, so off you go.


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## Jimmy (May 19, 2017)

Eclectic12 said:


> Maybe it's me ... but with the question about reporting foreign interest from an investment account on a Canadian tax return, it seems that Canadian taxes on foreign assets is another area that your friend has to consider.
> 
> For #1 ... no idea though posts about opening a Canadian bank account while resident of another country or similar have indicated it can be problematic. As there are UK relatives who presumably can ask locally, IMO that would be a good starting point.
> 
> ...


Ok Thanks. That is helpful.


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## Jimmy (May 19, 2017)

Longtimeago said:


> Actually Jimmy I can answer that simple question. But yes, so can Google, so off you go.


Yet you couldn't. So off you go to google yourself.


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## Eclectic12 (Oct 20, 2010)

Jimmy said:


> Eclectic12 said:
> 
> 
> > ... For #1 ... no idea though posts about opening a Canadian bank account while resident of another country or similar have indicated it can be problematic. As there are UK relatives who presumably can ask locally, IMO that would be a good starting point.
> ...


Maybe things have changed but according to this Guardian article, being in the UK with a UK passport and Canadian driver's licence didn't work.
https://www.theguardian.com/money/2014/aug/22/canadian-uk-bank-account-open-refused

The UK based advice seems to be to look for a Canadian bank that has UK operations or a UK partner.


Cheers


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## Jimmy (May 19, 2017)

Eclectic12 said:


> Maybe things have changed but according to this Guardian article, being in the UK with a UK passport and Canadian driver's licence didn't work.
> https://www.theguardian.com/money/2014/aug/22/canadian-uk-bank-account-open-refused
> 
> The UK based advice seems to be to look for a Canadian bank that has UK operations or a UK partner.
> ...


Thanks again. Just getting some ideas for now but that maybe the only option.


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## Longtimeago (Aug 8, 2018)

Jimmy said:


> Yet you couldn't. So off you go to google yourself.


Yet I could but did not. Your OP asked primarily about hiding an asset from creditors and partners. How to open a UK bank account was only incidental to your main question. I chose to focus on the primary point.

I do know several ways to open a UK bank account both while in Canada or in person in the UK. I have done so personally. But I have no intention of helping you to do so given the real aim of hiding an asset. 

I am quite happy however to tell you that if you open an 'International Account' with a UK bank through an affiliation with a Canadian bank, from Canada, that it will be totally transparent to an insolvency trustee in Canada, in the event of a bankruptcy. 

I am also quite happy to tell you that to open an account in person with a UK bank, you will need to prove residency in the UK.


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## Longtimeago (Aug 8, 2018)

Eclectic12 said:


> Maybe things have changed but according to this Guardian article, being in the UK with a UK passport and Canadian driver's licence didn't work.
> https://www.theguardian.com/money/2014/aug/22/canadian-uk-bank-account-open-refused
> 
> The UK based advice seems to be to look for a Canadian bank that has UK operations or a UK partner.
> ...


Eclectic12, the person in the article you link wants to open an account to deposit their UK government pension into. They live in Canada, so ask yourself why they are not asking how to get their UK pension deposited into their Canadian bank account? That is not at all difficult to do.

The answer of course is that they want to pay income tax on the money in the UK which will be at a slightly lower rate than if they bring the income into Canada directly. I know as both my wife and I have UK pension income which we declare in Canada and pay tax on in Canada. 

Now put yourself in the UK bank's shoes. What do they see? Exactly what I describe. This money would go into the UK bank and then most likely be promptly transferred to a Canadian bank each month. So where is the benefit to the UK bank? Are they likely to make much interest when they only hold the money for a couple of days? Are they likely to be able to make money on a loan or mortgage to this person?

Many people in the same situation use this method of declaring the income in the UK to reduce tax even though they are not living there. There are also some who do this and declare a UK residency when in fact they are not resident there. They do this because if they are resident in the UK, their pension is adjusted for inflation each year while if they show residency in Canada and take the pension there, the pension is frozen at the rate on day one and is not adjusted for inflation over the following years.

If they open an account using an affiliated Canadian bank, it is then transparent to the UK Pension Office as an 'International Account' which of course would raise the question of why would someone have that account if they were claiming to be resident in the UK.

In other words Eclectic12, there is more to the picture than meets the eye. The article leaves out as much information as it provides. There is no real problem in someone from Canada opening a UK bank account provided they have nothing they are trying to hide from anyone. I have personally opened a UK bank account on day 2 of arrival in the UK (I will not go into detail) without difficulty. BUT the bank has to see a reason that benefits them to open that account, regardless of residency and money laundering concerns etc.


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## Jimmy (May 19, 2017)

Longtimeago said:


> Yet I could but did not. Your OP asked primarily about hiding an asset from creditors and partners. How to open a UK bank account was only incidental to your main question. I chose to focus on the primary point.
> 
> I do know several ways to open a UK bank account both while in Canada or in person in the UK. I have done so personally. But I have no intention of helping you to do so given the real aim of hiding an asset.
> 
> ...


Whatever. We'll agree to disagree Ciao


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