Transferring customers to our Lithuanian entity - impact on declaration duties

[Frank]

You can look at it like this: Revolut did not offer, at any point, proper UK accounts. They’re using a setup where they use account details like endpoints to route money in and out of an e-money wallet. This virtual money is then backed up by real money held in (proper) pooled accounts with several UK banks. What’s happening now is that those e-money wallets holding virtual money move to a Lithuanian company, and the real money that backs up the virtual money is moving as well to bank accounts outside the UK.

But it seems that both Transferweise and Revolt are hoping that they can still use third party UK companies to provide the connection service that will link the UK account number to your Lithuanian (or in case of Transferwise: Brussels) e-money wallet.

I asked Transferwise specifically about this. And the support confirmed to me that personal UK account details will be still available after Brexit. So I don’t see why it can’t work for Revolut as well.

[pprt]

So Revolut is offerîg me services in Lithuania « connecting » me to a local account in the UK. At the end of the day I do « own » an account in the uk, right?

[Frank]

I don’t think so. Here’s how I understand this: Revolut is providing a bunch of numbers that allow to pay money into an account in Lithuania.

It’s like a mobile number with a UK country code but your phone provider is a Lithuanian company. You’ve got a UK phone number, but no UK mobile phone contract. Same here: you’ve got a UK bank account no, but no UK bank account.

To further complicate this: with Revolut, an account number never has represented a bank account. The accounts are e-money accounts. It’s a small distinction that might not say much, but it might be a critical here. IBANs were always detached from a bank account ledger – from a regulatory perspective. With proper bank accounts, the account no does represent the account itself in a bank’s core banking system, the internal books of an entity called bank. With Revolut, they are more like aliases pointing to a database that further points to bank accounts where the actual money is stored. This extra layer between users and a bank’s ledger is the e-money account.

[Frank]

Having said this, if you’re looking at it from the perspective of you country’s tax authorities, it certainly behaves and allows you to use it like a local UK account. So I would include it in a list of foreign accounts, despite its weird construction.

[pprt]

@Frank

behaves and allows you to use it like a local UK account. So I would include it in a list of foreign accounts, despite its weird construction.

Thanks @Frank your provided a very comprehensive answer.

[Graham_Lees]

@pprt @Frank @klusek
Now. this is further complicated by the receipt of an email from a couple of days ago:

You need to declare your Revolut account

We wanted to share some info that might be useful for your tax declaration.

Hi Graham,

It’s important to stay in control of your finances, and that includes keeping on top of taxes. So, we wanted you to know that you need to declare your Revolut account in your income statements.

As a French resident, you need to declare any account you have outside of France.

How to do it

When filling in your yearly declaration, declare your Revolut account using the form ‘cerfa N°3916’, where you’ll be asked to give your account number, the date you opened your account, and Revolut’s Lithuanian address.

Your Revolut account number

You can find your IBAN in your Revolut app by clicking on the Euro flag next to your Euro balance on the homepage. Your Revolut account number is the last 10 numbers of your Revolut IBAN.

Account opening date

• Open the app
• Tap the top left profile photo
• Tap ‘Documents’
• Tap ‘Subject access request’

This will generate a document, and you’ll find the date you opened your Revolut account at the top.

Revolut address

Since Brexit, your account has been migrated to our Lithuanian entity, so you’ll need to use this address:

Revolut Payments UAB

Konstitucijos ave. 21B

08130 Vilnius

Republic of Lithuania

If you’ve made investments and received capital gains or dividends, you’ll also need to report them in your income statement. These profits may be subject to tax in accordance with national tax rules. It’s your responsibility to understand how to declare, and to make tax payments.

This doesn’t exempt you from consulting the legal provisions in force or from obtaining more information from the tax authorities or from your accountant.

Thanks,

Team Revolut

Trouble is, whilst suggest that the LIT account requires declaration (and they tell you that the account number is the last 10 digits of the IBAN) the Sterling GBP account remains and is, as usual for GB accounts, 8 digits.
They also provide the LIT address, not the UK address suggesting that it is only the LIT details that are required to be declared to the fisc.
I have only declared the LIT details on the new cerfa 3916 online 2021 and feel pretty sure that meets the requirement (and can be justified with the fisc by producing the email from Revolut if challenged).
If you also had wallets in zloty, USD and on and on and on, would you need also to declare all those wallets too? The 3916 would become longer than the reurn itself!
seem pretty confident that declaring the LIT account is sufficient otherwise they wouldn’t have taken the trouble to write to their French users saying so, would they?

[Frank]

As far as I understand the situation, as a French customer, you’re not served in any way by the UK entity. The GBP account functionality is provided by the LT company as well.

My assumption is that you would have to declare foreign currency accounts as well, and considering Revolut’s setup, I would probably declare it like this:

Account No.: unified IBAN for multi currency accounts
Account balance: individual value for each currency, or alternatively accumulated total value in EUR for all accounts that are linked to this multi currency IBAN.

Does that make sense?

[Graham_Lees]

@Frank

Account balance: individual value for each currency

AFAIK there is no requirement to include account balances on cerfa 3916. Are you referring to something else here @Frank perhaps?

[Frank]

Okay, sorry. I am not familiar with requirements in France.

Then the situation should be straightforward. The LT IBAN is a multi currency IBAN. Despite having a UK sort code / account no. linked to a UK wallet, the GBP wallet also shares the same LT IBAN with the EUR account (as shown under „SWIFT“).

I would argue with declaring the multi currency IBAN, you’ve included the GBP wallet (and all currencies that share the same IBAN) already. The UK account details aren’t a separate account, they’re just an additional routing option for the same account.

[Graham_Lees]

That’s my view too @Frank I don’t think we need to do more than we have but it’s always encouraging to have a second opinion

[pprt]

Just to be on the safe side, I am declaring these Revolut accounts on my 3916 online declaration:

• Revolut Trading, Managed by Revolut Trading LTD (UK)

• My Revolut LT07… account, managed by Revolut Payment UAB (LT)

• My Revolut GB61 REVO …, managed by Revolut LTD (UK), next year will be the last year I declare this one as supposed to close in July 2021

• My account xyz sort code abc, managed by Revolut Payments UAB (LT)

• Then one declaration for each Crypto that I own in Revolut, managed by Revolut Payments UAB (LT): BCH, BTC, ETH, LTC, XRP.

9 accounts declared in total. There is no need, in my opinion, to declare your wallets in zloty, USD and on and on and on.