Protection against government raiding deposits???

I

inver

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Hi,

With their tax on pension schemes introduced recently the government has paved the way to get their hands on peoples deposit accounts.

For Irish citizens what is the best way to protect against this?

Can the govt. tap in for example to a sterling account set up in Barclays bank?

I presume they can hit Rabodirect, Nationwide UK given that they can currently apply DIRT to these??
 
The government could seize deposits in banks operating in Ireland. This would include Rabobank, Nationwide UK, Northern Rock et.

They probably could not seize a deposit in Barclays in London.

They certainly could not seize a deposit in Switzerland.

In the very unlikely event that they do something like this, they probably would impose a 10% levy on all deposits owned by Irish residents wherever those deposits are situated. So although you may have €100k in a Swiss bank account, you would be obliged to pay €10k to the Irish government.
 
Brendan Burgess said:
The government could seize deposits in banks operating in Ireland. This would include Rabobank, Nationwide UK, Northern Rock et.

They probably could not seize a deposit in Barclays in London.

They certainly could not seize a deposit in Switzerland.
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I was told a few years ago by someone I met on a plane who worked for a Swiss bank, that in general a state can only seize private assets from a foreign bank through a court order which would have to be based on a crime. As pretty much all countries see tax evasion as a crime, most banks will honour a foreign court order to seize assets because of a tax evasion case. However, in Switzerland tax evasion is not a crime, and therefore Swiss banks will not seize assets because of a tax evasion case. I don't have any links to back this up, but I also have no reason to believe the guy was making things up.

Brendan Burgess said:
In the very unlikely event that they do something like this, they probably would impose a 10% levy on all deposits owned by Irish residents wherever those deposits are situated. So although you may have €100k in a Swiss bank account, you would be obliged to pay €10k to the Irish government.
Click to expand...
But in that event you could leave the country to avoid paying the tax.
 
That's a very good point Brendan. The risk is just the same for foreign banks based here as it is for Irish Banks. Now that we (i.e, the State), own the Irish banks, more or less, maybe depositors should think hard before putting their funds into foreign banks.
Incidentally, some foreign based banks offer no service other than gathering deposits. And it seems to me that they came here to take advantage of the fear and loathing people had for the former Irish banking system.
 
Brendan,

Do you really see a move to capture some of deposits as unlikely??
Personally I think its a certainty with 18 months.
Just seems to be very little can be done to protect against it if you are an Irish citizen.
 
If this was likely to happen, then any savings should be used to pay down mortgages???
 
I am attaching a link to a previous query I posted. Indeed if anybody had any further suggestions to add to it, they would be much appreciated. We ourselves eventually plan to relocate to France hopefully in early retirement. But this is 10-15 years off yet and although we have not decided on exactly what part of france we would like to live in, I sometimes wonder should we just spend most of our savings we have in the banks and buy somewhere in france now while our euros are worth something.
http://www.askaboutmoney.com/showthread.php?t=147385
 
Monagt ...i agree with you paying down the mortgage before any possible government levy or collapse of the euro is the best move , however how to know when to switch from savings to mortgage repayment is the trick...

I wonder would any bank consider a proposal from a mortgage holder to via a lumpsum payment to pre-buy a mortgage holiday ... ie you agree to pay 50k off you mortgage now on the agreement that if your circumstances changes ( lost Job) that you could call on that payment to buy you time years perhaps while you found a job or retrained.
I would have thought this would appeal to banks on a number of fronts :
1. Their overall exposure is reduced (they get the money now - rather than never)
2. If you have a low rate tracker then the early funds would reduce their losses on that loan.

From our point of view :
1. It reduces the risk associated with euro failure
2. Protects your savings from the government swipe


Any thoughts...???
 
Hi codology,

To my knowledge that does exist somewhat with certain lenders. I'm with PTSB and you can overpay your mortage where the overpayment goes into a separate prepaid section.

So this prepaid balance doesnt get applied immediately to the mortgage balance but in fact builds up over time. Ultimately it can be used against the balance OR if you lose job/go on holiday etc, the mortgage balance can then consume from this prepaid amount.

Not sure if they let you lump a large sum once off into it though. You could be cheeky and overpay by like 2k a month for a period of time to build it up. That would probably work.
 
The only scenario that wouldnt protect you from would the scenario of default and paddy seeing the punt again which would cripple your investment into your home.
 
Surely if Ireland defaulted and returned to the Punt ...your average joe would be better off having a lower mortgage than having deposits switched from euro to punt ...or would your mortgage convert at the same rate as your savings...???

Example : Day one of Ireland exit (OR KICKED OUT) of Euro :

Mortgage 200,000 euro = 400,000 Punt
Savings 50,000 euro = 100,000 Punt

Is this correct ...???

Also on the issue of Ireland being Kicked out of the Euro , what would happen in that case ... could Ireland simply turn around and say " if you are kicking us out then we're defaulting on all our debt ...we'll take our chances on the bond markets (which would probably lock us out).
 
A devaluation wouldn't just mean a smaller mortgage becuase it would cripple the actual value of your home too.

Say your home is worth 200k now in resale terms.
And you owe 200k balance cos you bought its at 250k in 2008

So you sink 50K into it to reduce balance to 150k.
If you sold at 200k, you come out at 50k minus fees etc

But say default day comes in a months time....and result is 70% loss of euro to punt.

So your house is suddenly only worth 60k euros, your balance is 45k euros so even if you sold then.... 15k euros minus fees etc.

You'd certainly be better off sticking that 50k offshore in an account before lumping it into a mortgage and house valuation which be crippled by a default. Unless of course you never plan to sell ....ever.... :)
 
L0llip0p,

How did you calculate the 45k balance ...???

Surely you still owe 150k euro which would equate to ( assuming your suggested 70% fall) 500punt... regardless of the fall in value of your house...???
 
In a default, our euros would be converted to punts directly.
So your 100k euro would become 100k punt rebadged with no conversion. You don't get richer, you become poorer.

With the punt trading weakly against the euro in that instance, thats where the value of your house and indeed the cost of your mortgage balance goes down.

It wouldnt make sense that you continue to pay a mortgage balance of 150k euro where you can only sell the house in punts worth an equivalent of 60k euro!

Everything would be "punted" so that would break the ECB tracker tie for many mortgage holders which would means a smaller mortgage balance but potentially much higher interest rates on those balances.

This is why that 50k euros in the off-shore account would immediately become much more valuable because this wouldnt be at the mercy of a direct conversion to punt.

I dunno...I'm not trying to start an argument with you Codology :) This was just my understanding of what would happen ....right or wrong as it may be
 
Brendan Burgess said:
The government could seize deposits in banks operating in Ireland. This would include Rabobank, Nationwide UK, Northern Rock et.
Click to expand...

And what would be the legal basis for such an action??

Brendan Burgess said:
They certainly could not seize a deposit in Switzerland.
Click to expand...

WRONG! If your first statement was held to be legal by an Irish court, then FINMA, the Swiss agency responsible for dealing with such requests would not only freeze the assets, they would provide assistance in identify the assets. In fact based on recent cases, it is unlikely that they would even wait for a judicial review by a Swiss court before cooperating.

Jim (Switzerland)
 
I thought the rate being bandied about was 0.05% if it were to be as high as 10% that would be really savage especially on anyone with meagre savings of 50k or less.

Is it likely there would be a minimum exclusion level.

How many billions would a 10% leavy bring in!
 
An obvious way to 'protect' deposits, is to spend them.

At least you will get some value from your money.
 
Problem with spending them is my few bob have to last me until retirement and pension kicks in (if it is still there) as there is no prospect of getting a job in my line or any related area. Have already lost the price of a new car on bank shares, can't afford to lose the price of another one.
 
Problem with spending them is my few bob have to last me until retirement and pension kicks in (if it is still there) as there is no prospect of getting a job in my line or any related area. Have already lost the price of a new car on bank shares, can't afford to lose the price of another one.
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I know where you're coming from.

I'm not necessarily suggesting that you go out and buy a load of crap. Instead spend it on stuff that has long term value. Consider what you'll buy in your retirement and see if you can spend money on it earlier. (eg, fuel - forestry)

Or buy stuff that's a better, safer store of wealth.
 
Not sure what you are getting at, buy my own trees for chopping down?

No one seems to have a solution as to where to put savings to keep them safe, it's frightening. I thought when I lost my job that was bad, never thought trying to keep the redundancy money safe would be worse.
 
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