Raid on bank accounts in Cyprus

[MrsJREwing]

Nearly 10% of savings will be taxed from private individuals savings, to save the banks.

[flatbread]

Edam, surpringly the Euro is still strong, $1.29 to a euro. Can't understand why, given that the US economy and dollars are a better hedge than the eurozone.

[drivinmecrazy]

Anyone doubting it will spread through the Euro zone should take note. My Mum's accountant in Spain has had to make a full declaration of Mums global asssets, including property held in UK and Spain, and all her overseas accounts and investments (only bonds are exempt). It's not clear at the moment if Spain is going to levy an immediate tax but the reasons given have been the huge amounts of money wealthy spaniards have been moving out of Spain in the last 12 months leading to a huge drop in tax revenue.
Unfortunately many non spanish speaking ex-pats are currently oblivious to this and only have until 1st April to file their assets over 50,000 euros, upon which time fines will be levied.
Any attempt to move assets is now futile because its based on accounts and assets held before 31st December 2012.
Watch this space, am sure they will be following on the coat tails of Cyprus very soon

[drivinmecrazy]

Frighteningly legislation to approve this was passed by the European parliment quietly in November. Spanish government has also enacted, though not yet enforced, legislation to deny any non fiscal resident non emergency medical care. many Britsh ex pats believe because they hold resedencia this doesn't apply to them. many ex-pats aren't aware and most have no private medical care so will be forced back to the UK

[flatbread]

Crazy, but they can only grab what is within the eurozone. Even if you declare your worldwide assets, thy have no jurisdiction over funds/property outside the zone. Atleast as far as I am aware...

Agree that the Cyprus move is a trial run. Probably Italy is next.

[DolomitesDonkey]

edam Your currency has been devalued and is suffering the effects of inflation - the robbery has simply been disguised.

Same as it ever was - spend your money on booze & fast living - the rest you should waste. It is becoming more and more apparent that those with visible assets - i.e., the eejits who saved their money will suffer further grabs - as if the raid on the private pension pots wasn't enough.

[flatbread]

Yes, but erosion of savings through inflation is an acceptable form of theft, as there is no legal contract to prevent this.

Taking secured/guaranteed bank deposits is not. It takes us into unchartered territory.

[drivinmecrazy]

Would hope that's true flatbread but she's still had to declare parts of her investment portfolio in the States.

[CoteDAzur]

The Cypriot government was scrambling to ease the terms of the bailout on Monday to push the deal through parliament. The Wall Street Journal reported that it proposed spreading the pain of the one-off tax more evenly. Under the new proposal, smaller depositors with up to ?100,000 would be taxed at 3%; savers with ?100,000 to ?500,000 would be taxed at 10%; and those with more than ?500,000 at 15%. The original deal was for Cyprus to tax every depositor with less than ?100,000 at 6.75% and those over that amount at 9.9%.

... says The Guardian

[flatbread]

It makes no sense to take 3% from under ?100k. It is a small amount with huge confidence and legal repercussions.

Deposits over ?100k are not guaranteed, so you not solely focus on these?

Really bizarre.

[CoteDAzur]

Confidence is already shot. It doesn't even matter if they don't impose any tax on bank accounts anymore. Anyone who can possibly move his money elsewhere will do so on the banks' first business day.

[flatbread]

In fact, even if they completely back-pedal and leave the under ?100k depositors intact, the euro-leaders have shown their hand that no deposit is sacred and legal contracts mean diddly-squat.

Who will trust their bank deposits are safe from a government grab in any euro country?

[flatbread]

X-posted. So true

[noddyholder]

The banks are closed until Thursday

[flatbread]

And the question is Which Thursday?

[CoteDAzur]

Another question is whether Cyprus will have a banking system left on Friday.

[ttosca]

...and the madness of Capitalism continues.

[Xenia]

I was looking at some dodgy deal from a Cyprus person last week. I think the country is heaving with dubious and laundered money.

As for UK depositors as long as we stick with tougher cuts, much much tougher I suspect the UK will be safe from confiscation of bank deposits and I hope they do not impose taxes on houses as those thinking they do not have a "mansion" may well find like all taxes it starts with a house worth £1m and comes down to those costing £300k. Taxes on savings which were made out of taxed income just stop people saving.. although I suppose at present although on a personal level for most people paying off debt is very wise, for the nation they would rather we were all spend spend spend at present to get the economy going.

Just as well money has no effect on personal happiness.

[CoteDAzur]

Re houses worth £1m - There aren't many flats worth less than £1m in Central London.

How would they judge what a house is worth, anyway? There would be many properties in places like Central London that are bought 20 years ago for a fraction of that amount but are now worth millions. Their owners would easily not be wealthy or possibly even be low-income.

[CoteDAzur]

Talk in Monaco today is that there will now be an invasion of ex-Cypriots, following on the heels of Russians and Greeks.

[MrsJREwing]

Look at article 136, European stability mechanism, Cyprus have no choice, like the others, all for the good of the Euro.

[flatbread]

By most accounts, Cyprus exercised fiscal prudence. So Osbourne's statement that it s an example of why we need more cuts is silly. Remarkably ignorant, even by his standards.

The problem in Cyprus is that the banking sector is too big, 900 times GDP. And loans/investment predominantly in Greece have soured. Hence the need to recapitalize the banks

[flatbread]

The mansion tax is altogether another matter.

Taxation has been getting retrogressive, in the last twenty years or so.

There is no reason why a property worth, say, half a million, pays the same property tax as one worth five million. The council tax bands, as they currently stand, are inadequately spaced and not progressive.

I suspect all properties, except the ones in he lowest band, will and should be taxed higher.

At he same time, though, we need to keep a closer eye on council finances and hire a higher caliber of council managers than the current lot.

[CoteDAzur]

What does that mean "Banking sector is too big"? Like, in Switzerland, you mean. That doesn't seem to bother the Swiss.

The problem in Cyprus is that its banks were heavily exposed to Greek debt whose worth was reduced practically to zero.

[CoteDAzur]

"There is no reason why a property worth, say, half a million, pays the same property tax as one worth five million."

It won't, even if taxes are the same in % terms.

Half a million property will pay x.

Quarter of a million property will pay 1/2 x.

People with high-worth property aren't necessarily rich, you know, especially if the property was bought a long time ago.

[edam]

Cote - are you talking about a completely different tax? Council tax is horribly regressive as the top band is based on 1991 values. So a house that is now worth £2m pays the same as a house that is now worth £750k. Obviously if you have a house worth £750k you are unlikely to be desperately poor - otherwise you'd have sold the house. But still, it's unfair that someone more than twice as wealthy as you only has to pay the same amount.