Bank - Documentation Requirements

[the0ni0nking]

Back in Dec-23, I transferred funds from my personal (Spanish) bank account to another personal (Isle of Man) bank account.

The sum involved was a mid 5 figure sum done in 1 transaction on-line.

Now, c6 weeks later my Spanish bank has stated that they need me to explain the purpose of this transaction (am fine with doing that - xfer to own account with a different institution where it is generating a higher level of interest than provided by the Spanish bank).

However, that is not their only request - as part of understanding the purpose of the transaction - they also want:

(i) legal evidence of the source of funds (if they look in the bank statements for my bank account with them they will see where c80% of it has come from - all of which was Spanish income and declared on my Spanish tax returns every year since c2017/18. The residual 20% will have come from a balance transfer from another Spanish bank when I closed that account to move to them!)

(ii) tax return for 2022

(iii) dated proof of my residence (they say a utility bill is fine)

Now, I appreciate this is Spain and not the UK but while I can explain in words (i) and also provide (iii), I don't see why any financial institution either in the UK or the EU can require my tax return? And, to make me more irritated, it's not even the tax return relating to the year the transaction happened in?

I don't know what they may do if I don't provide it (I'm not going to provide it) but has anyone else experienced this and is there any legislation I can call on to tell them politely to say this is information overkill?

[GoSeigen]

(ii) tax return for 2022

Maybe they just need this for proof of tax reference number in which case a similar but less intrusive document might suffice?

GS

[Niksen]

and is there any legislation I can call on to tell them politely to say this is information overkill?

The legislation that is likely driving this, not the legislation you are seeking to counter it, is the EU Anti Money Laundering legislation that was strengthened in early 2023 so some months before your transfer.

I doubt that EU AML legislation tells banks which specific documents they should check to ensure that their customers are not moving money for bombs, drugs, etc. but is more vague, and thus if the Spanish bank considers that a tax return is needed to satisfy that it was legally declared income then I doubt you will shift them from that position.

What will they do if you don't provide it. Well as the money has already gone I doubt they have the ability to recall it, but going forward I would suspect that Spanish bank will simply freeze your account.

[didds]

(i) legal evidence of the source of funds (if they look in the bank statements for my bank account with them )

(ii) tax return for 2022

(iii) dated proof of my residence (they say a utility bill is fine)

... I can explain in words (i)

I'd send them their own bank statements with "Santander" or heavily circled in red

I don't see why any financial institution either in the UK or the EU can require my tax return? ... I don't know what they may do if I don't provide it (I'm not going to provide it)

what if you dont have a tax return? eg I don't since I moved from self employment 13+ years ago

Good luck.

[scrumpyjack]

Ask for a copy of their CEO's tax return under the 'know your bank' rules

[Lootman]

Now, I appreciate this is Spain and not the UK but while I can explain in words (i) and also provide (iii), I don't see why any financial institution either in the UK or the EU can require my tax return? And, to make me more irritated, it's not even the tax return relating to the year the transaction happened in?

I don't know what they may do if I don't provide it (I'm not going to provide it) but has anyone else experienced this and is there any legislation I can call on to tell them politely to say this is information overkill?

The only time I was asked by a third party to produce a tax return was for a civil court case many years ago. I provided a copy but I heavily redacted it so that the relevant amounts could be seen but not anything that was over and above the scope of the inquiry.

So I managed to satisfy the request without compromising my privacy on most of the information. Could that work here?

As for "what they could do" if you fail to comply, I would think not much, other than close your account.

[torata]

Back in Dec-23, I transferred funds from my personal (Spanish) bank account to another personal (Isle of Man) bank account.

The sum involved was a mid 5 figure sum done in 1 transaction on-line.

Now, c6 weeks later my Spanish bank has stated that they need me to explain the purpose of this transaction (am fine with doing that - xfer to own account with a different institution where it is generating a higher level of interest than provided by the Spanish bank).

However, that is not their only request - as part of understanding the purpose of the transaction - they also want:

(i) legal evidence of the source of funds (if they look in the bank statements for my bank account with them they will see where c80% of it has come from - all of which was Spanish income and declared on my Spanish tax returns every year since c2017/18. The residual 20% will have come from a balance transfer from another Spanish bank when I closed that account to move to them!)

(ii) tax return for 2022

(iii) dated proof of my residence (they say a utility bill is fine)

Now, I appreciate this is Spain and not the UK but while I can explain in words (i) and also provide (iii), I don't see why any financial institution either in the UK or the EU can require my tax return? And, to make me more irritated, it's not even the tax return relating to the year the transaction happened in?

I don't know what they may do if I don't provide it (I'm not going to provide it) but has anyone else experienced this and is there any legislation I can call on to tell them politely to say this is information overkill?

Interesting that it's the Spanish bank requiring this info, not IoM.

Unfortunately this seems to be the way things are going, and I can tell you that 'show us your tax return' is not limited to Spain. I expect your transfer triggered a "hang on we haven't got updated KYC info' on record since the account was opened" alert.

In my experience, unless you jump through their hoops exactly as they've specified, no matter how galling or illogical, you will to all intents and purposes get locked out.

For future, it may be worth finding out what the headline figure is that if you're under won't trigger the alert on their system. Alternatively pre-warning them may help. There also might be a splash screen that you can fill in to show the source and the use of the funds. But it's going over that headline figure that seems to kick things off.
But as I say, I'd expect it from IoM, so it may just be KYC box ticking.

torata

[the0ni0nking]

Update:

Despite the initial document request by the bank, I responded (via their in app messaging service which is how they contacted me) by simply stating this was a transfer from earned income which is visible if they look through the previous statements of the account to an account with an alternative provided paying a higher interest rate.

Silence; until yesterday.

Their previous request was for me to provide in addition to a narrative explanation of the reason for the transfer but also as listed by them:

(i) legal evidence of the source of funds
(ii) Tax return 2022 (specifically form IRPF 100) (My note - this is actually the form you declare Spanish income tax on and there is no guarantee you actually have to submit this as it is dependent on circumstances)
(iii) dated proof of residence e.g. gas/water/electric < 3months old

Their reply today - contacting me again to request additional information (and no reference to previous requests):

(i) P60

So now, having not received (ii) or (iii) from me in their initial request and (i) was provided by telling them to look at their own bank statements, they've dropped the request for Spanish related documents and want a UK tax form.

I'm pretty sure they don't really know what they're doing and I have access to an alternate Spanish account which hasn't needed any such documents. People alluded to that this may have been KYC but they did this in Nov-23 and I provided it all, spoke to a person and she confirmed it was all fine. So as they appear to be idiots, I think I'll move any recurring spend items across to the other provider and simply close this account.

[the0ni0nking]

And now the conclusion.....

As expected albeit quicker than I expected, the notification came today confirming they intend to "terminate my account".

They state "To ensure our customers’ privacy and account safety, we are obligated to run routine checks on accounts and transactions. As part of these checks, we have identified irregularities that require us to terminate your XXXXXXXX account pursuant to the Termination Clause of the Terms and Conditions of your XXXXXXXX account on an extraordinary basis."

They've prevented inbound transactions on the account which would have irritated me more had I not already moved all my direct debits manually across to my new provider. I'm just waiting on confirmation from one provider where it wasn't possible to change it online and I had to email them but once that's confirmed, I'll clear out the account and close it down.

I was tempted to ask what specifically the irregularities are but rather than waste both my time and theirs (probably just mine as I doubt they'd reply!), time to move on.

[didds]

can't you leave 1 cent in it and thus they have to spend their own time and effort to close it down and dispose of that 1 cent. maybe you could ask for it as a cheque, posted to your home?



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