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GIBRALTAR

‘Brexit would hurt UK ability to protect Gibraltar’: UK minister

Britain leaving the EU would "seriously impair" London's ability to stand up for Gibraltar, Britain's foreign minister said on Wednesday on his first official visit to the contested UK territory on Spain's southern tip.

'Brexit would hurt UK ability to protect Gibraltar': UK minister
Gibraltar residents are expected to vote overwhelmingly to remain in the EU. Photo: AFP

“Britain's commitment to Gibraltar is absolute, it's unshakable and it will endure whatever the decision in the referendum,” Foreign Secretary Philip Hammond said referring to the June 23 vote on Britain's membership of the European Union.

“But I have to say this. Britain's ability to protect Gibraltar's interest will be seriously impaired if we are no longer members of the European Union, if we are no longer sitting around the table in Brussels when the decisions are made,” he said.

“We need to recognize that, with the best will in the world, Britain will not able to solve all the challenges that Gibraltar could face if there was an exit on June 23rd.”

Spain ceded Gibraltar to Britain in perpetuity in 1713 but has long argued that it should be returned to Spanish sovereignty.

The possibility of Britain leaving the EU has raised fears in Gibraltar, where many of the tiny territory's 33,000 residents worry that their only land access to the rest of Europe would be affected.

The small land border between Gibraltar and Spain has long been a source of tension.

Spanish dictator Francisco Franco went as far as closing the crossing in 1969, all but stranding inhabitants who had to rely on air and boat links until it was fully re-opened in 1985, a decade after the general died as
Madrid pushed a bid to join the EU.

Spain's conservative government in July 2013 imposed stringent controls at its border with Gibraltar, leading to lengthy queues for motorists, in what it said was a move aimed at clamping down on cigarette smuggling.

But Gibraltar said the enhanced border controls were in retaliation for the installation of an artificial reef in its waters that had prevented Spanish boats from fishing there.

The European Commission, the bloc's executive arm, sent inspectors to the British territory in September after Britain and Gibraltar complained to Brussels.

'Historical anachronism'

With Britain out of the EU, Gibraltar's border would become an external and not an internal EU frontier which has to be kept open under EU rules.

Spain could close the border and a legal challenge by Britain and Gibraltar would be more difficult.

While polls show the “Remain” and “Leave” campaigns are running neck-and-neck in mainland Britain, the vast majority of Gibraltar's roughly 33,000 residents want Britain to remain in the European Union.

A poll published last month by the Gibraltar Chronicle, the local newspaper, found that 88 per cent of the population would back EU membership in the referendum on June 23rd. Turnout is expected to be above 80 per cent.

Spain's foreign ministry issued a statement during Hammond's visit saying that Gibraltar is on a United Nations list of non-self-governing territories that are subject to a process of decolonization, calling the territory a “historical anachronism”.

“This colonial vestige destroys Spain's national unity and territorial integrity,” the statement said.

Spain’s acting foreign minister told Spanish radio in March that if Britain left the EU he would “raise the question of Gibraltar” the very next day.

Gibraltar reacted angrily to the remark. 

 

“The declared intent of the Caretaker Foreign Minister of Spain to bring the question of Gibraltar to the fore in the event of the UK and Gibraltar leaving the EU confirms the analysis that has already been made,” the Government of Gibraltar said in a statement to The Local made at the time.

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BREXIT

BREXIT: Premium Bond holders in Spain may have to cash in if no UK bank account

British residents of Spain have flagged up the latest Brexit consequence that could affect not just them, but also UK nationals living in other EU countries. Holders of Premium Bonds have been warned they may have to cash in their investments if they can no longer hold a bank account in their home country. 

BREXIT: Premium Bond holders in Spain may have to cash in if no UK bank account

The news has been shared on Facebook groups by people affected, after they were sent a letter from the state-owned UK savings bank NS&I (National Savings & Investments) warning them that a UK bank or building society account is an essential requirement for holders of their products. 

Premium Bonds are a type of lottery run by NS&I. Britons or UK residents can invest an amount ranging from £25 to £50,000 (€29 to €58,300+) in the bonds, with a number assigned to each pound invested.

Winning numbers are drawn each month awarding tax-free prizes. The amount invested is completely safe. As much as £1 million is on offer in the monthly draws, with the lowest prize coming in at £25.

NS&I also offers a range of other investment products, such as Income Bonds – which pay regular interest to holders – and Direct ISAs, which are a tax-free savings account. 

According to NS&I, which was responding to questions from The Local, all of their products are affected by this change.

The reason for the warning to customers is the fact that some UK banks have been closing the accounts of their customers based in the EU, given that these lenders no longer have the licence necessary to maintain them after Brexit. 

Judy Filmer has lived on the Costa del Sol for 21 years, and is among the NS&I customers to receive the letter, as did her 95-year old mother, who is also a resident of Spain.

“For many older folks this will be another upheaval to negotiate in the storm left by Brexit,” she told The Local.

“NS&I and Premium Bonds are cosy ways of saving, and pensioners find them easy to use.”

Lloyds Bank, Barclays and Coutts are among the lenders who have been closing accounts of their UK customers resident in the EU.

Other banks, however, including HSBC, Santander and NatWest, are currently taking no such action for clients that fall into this category. 

The letter sent earlier this year by NS&I stated that “some banks and building societies in the UK have told their customers living in certain EU countries that they will no longer be permitted to hold their UK-based accounts” since the Brexit transition.

“As you live in one of those countries,” the missive continues, “we realise that this could affect your ability to continue holding your NS&I Premium Bonds and Income Bonds account(s). This is because you need to have a UK bank or building society account to continue to operate an account with NS&I.”

The communication from NS&I goes on to warn holders of its products that they will have to provide details of another UK account held, or if “you don’t have access to another UK account in your name, you will need to close your NS&I account.” 

Speaking to The Local, NS&I clarified that “it would be impractical and against NS&I’s Customer Agreement (terms and conditions) for [these customers] to continue holding NS&I products. NS&I’s Customer Agreement requires customers to keep a UK bank or building society account open in order to operate its accounts.”

However, all is not lost. NS&I confirmed to The Local that “any UK bank or building society account that can receive BACS payments” will be accepted for holders of its products living in the EU. 

premium bonds

HSBC, Santander, NatWest and other banks are currently taking no action against clients abroad regarding Premium Bonds. (Photo by ADRIAN DENNIS / AFP)

London-based financial technology company Wise (formerly TransferWise) does offer such an account.

“British nationals living in the EU can open a Wise Account to get their own personal UK account details, which supports payments made by BACS transfer,” the firm told The Local. “This means UK citizens living in the EU can get a personal UK account number with the Wise Account.”

In practice this means that anyone who holds NS&I products, and is facing having their UK account closed by their lender due to Brexit, can open a substitute account with Wise or a similar firm that supports BACS payments and accepts UK nationals resident in the EU as customers. 

Providing, of course, no more ‘Brexit benefits’ arrive…

Tax on Premium Bonds

While winnings from Premium Bonds are tax free in the United Kingdom, it’s a different story if you are living in Spain.

The Local spoke to Spain-based financial adviser Chris Burke, who explained that the rules of each individual country determine whether tax is due on prizes from the product.

“In Spain, each year you must declare any monies received from these whether you access this or not, and pay the tax liable,” he explained.

“This would be savings/capital gains tax starting from 19 percent [for amounts up to €6,000] and rising up to 26 percent [for anything over €200,001].”

So be warned: while you might take home a tidy million pounds in the UK if your Premium Bonds number comes up, in Spain you’ll have to share it out with the Tax Agency.

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