• EU Savings Tax Directive (EUSTD) frequently asked questions

  • Please note that for EU residents the bank only opens new accounts on an exchange of information basis. By completing and agreeing to the new account application form you give your consent to this.

    Please refer to the account application form and the Terms and Conditions relating to the particular account you wish to open.

    The information contained in this document specifically relates to accounts opened with Lloyds Bank International Limited and/or Lloyds Bank (Gibraltar) Limited and is based on our current understanding of the law which is liable to change. It should not be construed as tax advice. No liability can be accepted for the effect of any subsequent legislation or change of official practice.

  • What is the EU Savings Tax Directive (EUSTD)?

    The EUSTD is an agreement between the EU Member States to exchange information with each other about customers who earn savings income in one EU member state but reside in another. It came into effect in July 2005.

    How the Directive is applied.

    Member states can apply the EUSTD in either of 2 ways:

    • Exchange of Information: used by the majority of EU member states or
    • Retention Tax (also known as Withholding Tax)

    What is 'Exchange of Information'?

    Exchange of Information means the Bank (Lloyds Bank International Limited and Lloyds Bank (Gibraltar) Limited will be obliged to exchange information on interest paid to all EU residents. The Bank will forward details of your identity, residence and amount of interest paid to the local tax authority who will forward this information to the tax authority in the EU Country in which you reside. Interest will be paid gross.

    What is Retention Tax? (This is also known as Withholding Tax)

    This means that Banks automatically deduct tax from interest paid to people resident in other EU member states but no information is provided to the tax authorities in either state. It is the Bank's responsibility to pay the Retention (withholding) Tax to the local island tax authority for onward transfer to the tax authority in the EU country where you reside. The present and historical rates of Retention Tax are:

    From 1st July 200515% (EUSTD became effective on 1st July 2005)
    From 1st July 200820%
    From 1st July 201135%
    Which countries have adopted the EUSTD?

    Member States of the EU which apply EUSTD are:–

    • UK
    • Ireland(Eire)
    • France
    • Germany
    • Netherlands
    • Spain
    • Portugal
    • Italy
    • Greece
    • Denmark
    • Sweden
    • Finland
    • Estonia
    • Latvia
    • Lithuania
    • Poland
    • Czech Republic
    • Slovakia
    • Hungary
    • Slovenia
    • Malta
    • Cyprus
    • Bulgaria
    • Romania
    • Belgium
    • Croatia

    Non-EU countries that are effectively abiding by the directive are:- Bonaire, St Eustatius, Saba, Curacao, St Maarten, Isle of Man, Jersey, Guernsey, Gibraltar and the dependent territories of the Caribbean (including Cayman Islands)

    Countries that presently apply Retention Tax (also known as Withholding Tax) are:–

    • Andorra
    • Monaco
    • Liechtenstein
    • San Marino
    • Switzerland
    • Luxembourg
    • Austria
    How will the legislative changes that came into effect on 1st July 2011 affect the two Island jurisdictions (Isle of Man and Guernsey) and Gibraltar?

    Isle of Man

    From 1st July 2011, Retention (Withholding) Tax and Exempt options will no longer be available.

    This means the Bank will be obliged to exchange information on interest paid to all EU residents with an Isle of Man account. The Bank will forward details of the customer’s identity, residence and amount of interest paid to the Isle of Man tax authority who will forward this information to the tax authority in which they reside. Interest will be paid gross with no Retention (Withholding) Tax deducted.

    Guernsey

    From 1st July 2011, the Retention (Withholding) Tax option will no longer be available.

    This means the Bank will be obliged to exchange information on interest payments paid to all EU residents with a Guernsey account. The Bank will forward details of the customer’s identity, residence and amount of interest paid to the Guernsey tax authorities who will forward this information to the tax authority in which they reside. Interest will be paid gross with no Retention (Withholding) Tax deducted.

    The exemption option is still available. See below for further information.

    Gibraltar

    There is no change. All EU resident customers who have accounts with our Gibraltar Bank are subject to Exchange of Information in accordance with Gibraltar Ordinance.

    How will the legislative changes that came into effect on 1st January 2015 affect the Jersey jurisdiction?

    From 1st January 2015, the Retention (withholding) Tax option will no longer be available.

    This means the Bank will be obliged to exchange information on interest payments paid to all EU residents with a Jersey account. The Bank will forward details of the customer’s identity, residence and amount of interest paid to the Jersey tax authorities who will forward this information to the tax authority in which they reside. Interest will be paid gross with no Retention (withholding) Tax deducted.

    The exemption option is still available.

    What if I am a resident in an EU country but am exempt from EUSTD?

    If you are exempt from the EUSTD you will need to supply us with an original Tax Certificate issued by the tax authority in the EU country where you reside. Alternatively you will need to provide an original letter issued by an Accountant, Solicitor or Tax Adviser (who is a member of a recognised professional body) confirming you are exempt from EU Savings Tax. No other documentation is acceptable. Please note Tax Certificates are only valid for a maximum period of 3 years and only apply to the accounts detailed on them.

    Can the Bank offer me any tax advice as to what would be best for me?

    We are unable to give specific advice regarding your individual circumstances and you may need to contact a Tax Advisor.

    I am an EU national residing outside the countries that apply the EUSTD. Am I affected by the Directive?

    If you hold an account with our Gibraltar business you are within EUSTD scope if your country of residency is in the EU or you live in a country outside the EU and have presented a passport or official identity card issued by a EU Member State. Customers who hold accounts with our Jersey, Guernsey and Isle of Man offices are within the scope of the Directive based solely on their permanent residential address and live in the countries that have adopted the EUSTD.

    I am registered Not Ordinarily Resident (NOR). Does this exclude me from the Directive?

    No. If your residential address is in an EU member state then regardless of a NOR declaration being signed the EUSTD will apply.

    Is there a minimum amount that has to be earned before the EUSTD becomes effective?

    There is no minimum amount applicable.

    Does the EUSTD mean that I have to pay more tax?

    It shouldn’t do. If you’re already declaring income to your home tax authorities, the EUSTD shouldn’t have any impact on the overall level of tax that you pay.

    If your account is held within a jurisdiction where Retention (withholding) Tax is deducted from your income, you may be able to offset this against your tax liability in the EU member state where you reside.

    Does the EUSTD just relate to Bank accounts?

    No. It also relates to other forms of savings income such as:

    • Interest paid or credited to accounts
    • Interest rolled up when the balance is repaid
    • Interest paid out on debt-claims (this includes all UK government securities and certain other types of bonds)
    • Interest accrued and paid out on debt-claims when such claims are sold
    • Distributions made by certain unit trusts and other open ended collective investment funds which have invested more than 15% of their investment in debt-claims
    • Accumulated income paid out when units in certain collective investment funds that have invested more than 40% of their investments in debt-claims are redeemed repaid or sold (to be reduced to 25% from 2011)
    Will my equity linked Structured Deposits be affected by the EUSTD?

    Equity linked Structured Deposit accounts opened in our Jersey, Guernsey and Isle of Man offices are not affected by the Directive.

    Equity linked Structured Deposit accounts opened with Lloyds Bank (Gibraltar) Limited fall within the scope of the Directive.

    Do companies or partnerships fall within the scope of the Directive?

    No. The Directive only applies to individuals. Legal entities and those entities (including domestic, foreign and limited partnerships) whose profits are taxed under the general arrangements for business taxation are not affected.

    Do sole traders come within the scope of the Directive?

    Yes. As the Directive applies to individuals, sole traders fall within the scope of the Directive.

    How are trusts and trustees affected by the Directive?
    • If the trustee is a corporate entity or not resident in an EU member state they are not subject to the Directive.
    • If a beneficiary has the immediate and absolute entitlement to the trust income and is resident in an EU member state the trustee will be deemed to be the paying agent if he or she is resident in Jersey, Guernsey, the Isle of Man or Gibraltar.
    • The beneficiary, if resident in an EU member state, being the recipient of savings income arising at trust level will be in scope of the Directive.
    Are Personal Representatives or Executors affected by the EUSTD?

    Personal Representatives and Executors, in their personal capacity, fall within the scope of the EUSTD if they are resident in an EU member state.

    Professional Personal Representatives and Executors e.g. Advocates / Solicitors are out of scope as far as the EUSTD is concerned as they are Paying Agents in their own right and subject to the EUSTD in this capacity.

    How will interest be apportioned for joint accounts?

    Interest will be apportioned equally between the number of parties to the account. Should the parties to the account be a combination of EU residents and non EU residents only the apportioned interest paid to the EU residents will be subject to the EUSTD.

    Can I obtain a certificate detailing the amount of Retention Tax deducted from my account?

    Yes, we can supply you with the appropriate certificate upon receipt of your request based on the tax year for the jurisdiction that the account is held in.

    Where can I find further information?

Our International services are offered by Lloyds Bank International Limited, Lloyds Bank (Gibraltar) Limited & Lloyds Investment Fund Managers Limited. See company Information. Whilst our services will be available to many customers, there are countries where, due to legal or regulatory restraints, we cannot provide them.

Rules and regulations made under the UK Financial Services and Markets Act 2000 for the protection of depositors and investors, including the Financial Services Compensation Scheme, do not apply to the financial services business of companies within the Lloyds Banking Group carried out from offices outside of the United Kingdom.

Lloyds Bank International Limited. Registered office and principal place of business: P.O. Box 160, 25 New Street, St. Helier, Jersey JE4 8RG. Lloyds Bank International Limited is incorporated in Jersey, No. 4029 and is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991 and investment and general insurance mediation business under the Financial Services (Jersey) Law 1998. Lloyds Bank International Limited subscribes to the Jersey Code of Practice for Consumer Lending and has also notified the Jersey Financial Services Commission that it carries on money service business.

The paid up capital and reserves of Lloyds Bank International Limited was £895m as at 31 December 2015.

Lloyds Bank International Limited is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. Eligible deposits are deposits held by private individuals and charities. Depositor protection does not extend to corporations, small to medium sized enterprises, partnerships and trusts. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website www.gov.je/dcs or on request.

The Guernsey branch of Lloyds Bank International Limited, principal place of business PO Box 136, Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 4EN, is licensed by the Guernsey Financial Services Commission to take deposits and to carry on controlled investment business and insurance intermediary business under The Banking Supervision (Bailiwick of Guernsey) Law, 1994, The Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended) and The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 (as amended), respectively, and is also registered with the Guernsey Financial Services Commission as a money service provider.

Lloyds Bank International Limited is a participant in the Guernsey Banking Deposit Compensation Scheme. The Scheme offers protection for 'qualifying deposits' up to £ 50,000, subject to certain limitations. The maximum total amount of compensation is capped at £ 100,000,000 in any 5 year period. Full details are available on the Scheme’s website: www.dcs.gg or on request from Telephone: +44 (0) 1481 706359 or Post: P.O. Box 53, 1 Smith Street, St Peter Port, GY1 4BD.

The Isle of Man branch of Lloyds Bank International Limited of PO Box 111, Peveril Buildings, Peveril Square, Douglas, Isle of Man IM99 1JJ is licensed by the Isle of Man Financial Services Authority to conduct deposit-taking and investment business and is also registered as an insurance intermediary in respect of general business.

Lloyds Bank International Limited is a participant in the Isle of Man Depositors’ Compensation Scheme as set out in the Depositors’ Compensation Scheme Regulations 2010.

Lloyds Bank (Gibraltar) Limited. Registered office and principal place of business: Royal Ocean Plaza, Ocean Village, Gibraltar, GX11 1AA. Registered in Gibraltar, no 99982. Regulated and authorised by the Gibraltar Financial Services Commission for the conduct of banking, investment and insurance mediation business. Lloyds Bank (Gibraltar) Limited is a participant in the Gibraltar Deposit Guarantee Scheme and a participant in the Gibraltar Investor Compensation Scheme. Details of the schemes are available on request.

Please note that, in relation to banking services which we provide, you might not be eligible for compensation under a deposit protection guarantee scheme available in your country of residence. If in doubt, contact your local banking regulator, visit their website or seek independent advice.

Lloyds Bank International Limited and Lloyds Bank (Gibraltar) Limited are wholly owned subsidiaries of Lloyds Bank plc. Lloyds Bank plc is incorporated in the United Kingdom, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278, and is part of the Lloyds Banking Group. Lloyds Bank International Limited and Lloyds Bank (Gibraltar) Limited place funds with Lloyds Bank plc and thus their financial standing is linked to that of the group. Depositors may wish to form their own view on the financial standing of Lloyds Bank International Limited and Lloyds Bank (Gibraltar) Limited and their parent based upon publicly available information. Download Lloyds Bank International Limited’s latest annual financial statements. Lloyds Bank (Gibraltar) Limited’s latest annual financial statements are available through Companies’ House in Gibraltar at www.companieshouse.gi.

Lloyds Investment Fund Managers Limited. Registered office: PO Box 160, 25 New Street, St Helier, Jersey JE4 8RG. Authorised by the Jersey Financial Services Commission under the Collective Investment Funds (Jersey) Law 1988.

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Legislation or regulations in your home jurisdiction may prohibit you from entering into such a transaction with us. We reserve the right to make final determination on whether you are eligible for any products or services. Residents or Nationals of certain jurisdictions may be subject to exchange controls and should seek independent advice before entering into any transactions with us.

Please note that, in relation to banking services which we provide, you might not be eligible for compensation under a deposit protection guarantee scheme available in your country of residence. If in doubt, contact your local banking regulator, visit their website or seek independent advice.