The United Kingdom is a modern and prosperous European nation, third largest economy in Europe.
The United Kingdom is a leading trading power and important financial center attracting investors from all over the world by its stable environment and financial and corporate legislation. Among more than 350 credit institutions operating in the United Kingdom, there are about 140 branches of foreign credit institutions from 40 different countries. Most of the British Crown dependencies and Overseas territories are also financial centers specializing in offshore finance and banking.
|Population (2016)||65 341 183 (+0.01%)|
|EU Status||member since 1973|
|National Currency||GBP (Pound sterling)|
|Exchange Rate (2017-01-19)||1 EUR = 0.86555 GBP|
|Nominal GDP (2015)||2 568.9 bln EUR (+0.13%)|
|Nominal GDP per Capita (2015)||39 500 EUR (+0.13%)|
|Real GDP Growth (2015)||2.2 % (2014: 2.6 %)|
|CPI, MoM (Aug 2016)||0.3 % (Jul 2016: -0.1 %)|
|CPI, YoY (Aug 2016)||0.6 % (unchanged)|
|CPI, Year Average (2015)||0.0 % (2014: 1.5 %)|
|Unemployment Rate (2015)||5.3 % (2014: 6.1 %)|
|Government Bond Yield (Sep 2016)||0.67 % (Aug 2016: 0.59 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||AA||very high credit quality, outlook negative|
|Moody's||Aa1||high grade, outlook negative|
|Withholding Tax||0.0 - 20.0%|
|Double Taxation Agreements||127 signed agreements|
|Exchange on Request||25 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 12 September 2012, Model 1|
|Financial Market Development||4.9 (max 7.0)||rank: 16th out of 138 countries|
|Banks' Soundness||5.1 (max 7.0)||rank: 62nd out of 138 countries|
|Banking Industry Country Risk||3||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||75 000 GBP|
|Country Ceiling for Deposits|
|Local Currency (Pound sterling)||Aaa||prime|
|Deposit Rates (Aug 2016, GBP)||0.97 % (Jul 2016: 0.95 %)|
|Banking Sector Structure|
|Number of Banks||365|
|Recent Changes (2015)||new banks: 5, closed banks: 7|
|Consolidated Assets (2015)||11 488.05 bln EUR (-5.66%)|
|The Royal Bank of Scotland plc (RBS)||Bank of Scotland|
|National Westminster Bank (NatWest)||Lloyds TSB Bank plc|
|HSBC Bank plc||Standard Chartered Bank|
|Barclays Bank plc|
|List of Banks in United Kingdom|
During the last 11 years EURGBP exchange rate was within the range 0.66325 - 0.95250, reaching its maximum in Dec 2008 and falling to its minimum in Jan 2007.
According to Eurostat, nominal GDP of United Kingdom in 2015 was 2 568.9 bln EUR.
United Kingdom outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.5% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 2.2% which was above the Euro Area average (1.6%) and above the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in United Kingdom was 39 500 EUR.
United Kingdom has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 7.1% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in United Kingdom in 2015 expressed as annual percentages of average consumer prices was 0.0% which was equal to the Euro Area average (0.0%) and equal to the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in United Kingdom are shown in Table 1.
|Natural person, resident||0.0||20.0|
|Natural person, non-resident||0.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
United Kingdom signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between United Kingdom and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
United Kingdom signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between United Kingdom and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
United Kingdom signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
United Kingdom has FATCA agreement with the U.S. in effect since 12 September 2012 (Intergovernmental Agreement Model 1). Financial institutions operating in United Kingdom are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: the United Kingdom's financial accounts hold in U.S. financial institutions will be reported to the United Kingdom's authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in United Kingdom is scored 4.9 out of maximum 7.0 and ranked 16th out of 138 analysed economies. Soundness of banks is scored 5.1 bringing United Kingdom into the 62nd place, trustworthiness and confidence of financial market is scored 5.0 (29th place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
United Kingdom is included into group '3' with economic risk scored '4' and industry risk scored '3'.
|Economic resilience||very low|
|Credit risk in economy||intermediate|
|Government support assessment||supportive|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in United Kingdom are summarised in Table 3.
|Scheme Participants||all credit institutions operating in United Kingdom (including branches of foreign banks), branches of the United Kingdom's banks abroad|
|Eligible Depositors||private individuals, small companies|
|Maximum Protected Amount||75 000 GBP|
|Paid In Currency||GBP|
Table 3. Deposit guarantee scheme in United Kingdom.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Pound sterling) deposit ceiling for United Kingdom is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
Compare Bank Deposits in the United Kingdom
Currently there are 365 credit institutions operating in United Kingdom.
Recent structural changes (2013 - 2015) of the banking sector of United Kingdom are summarised in Table 4.
|Number of Opened Banks||9||8||5|
|Number of Closed Banks||22||9||7|
Table 4. Recent structural changes in the banking sector of United Kingdom.
All the credit institutions operating in United Kingdom can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||138|
The list of the most recently opened banks in United Kingdom is provided in Table 6.
|Atom Bank Plc (new)||August 2015|
|China Construction Bank Corporation London Branch (new)||June 2015|
|Eurobank Private Bank Luxembourg SA London (new)||June 2015|
|RCI Banque (new)||April 2015|
|U.S. Bank National Association (closed)||January 2015|
|Novo Banco S.A. (new)||November 2014|
|Industrial and Commercial Bank of China Limited (new)||October 2014|
|CACEIS Bank Luxembourg (new)||September 2014|
|Banco Bradesco Europa S.A. (new)||August 2014|
|Nordea Bank AB (publ) (new)||June 2014|
Table 6. The most recently opened banks in United Kingdom.
There are 138 branches of foreign banks from 38 different countries in United Kingdom. Table 7 shows 10 countries having the biggest number of branches in United Kingdom.
|Country of Origin||Number of Branches|