Q. I have recently discovered a passbook for a building society account that had long been forgotten about. I have been told by a friend that under recent legislation the money held in the account could be given to the community! Is this true and if so how and when can I reclaim my money?
A. If like many people, myself included, when having a good clear out at the weekend you come across an old bank or building society book that has been languishing at the back of the drawer, with a pitiful ( I refer to myself here), or perhaps surprising sum within, your next thought might be whether to put the book back to sort out at another time or perhaps actually make an effort to realise the funds ready for an impromptu spending spree ( or in my case at best a coffee and a cake!). It may be of interest, then, that in November 2008 the government enacted the Dormant Bank and Building Society Accounts Act 2008, which enabled the government to use the money held in such dormant accounts by reinvesting it back into the community. If at this point you are now a little hot under the collar at the thought of the bank book you meant to do something about having been taken and used for someone else’s coffee and cake, then the brief overview that follows will hopefully go some way to calm your nerves.
Those banks which participate in the scheme, will transfer the amounts into the Reclaim Fund ( which is to be regulated by the Financial Services Authority), and after deducting reasonable expenses will under obligation transfer the remainder of the Reclaim Fund to the wider community, including various charities and the Big Lottery Fund, who in turn use for community projects.
Dormant accounts are regarded as those accounts which have not had activity within the last 15 years, however it is suggested that as well as a withdrawal or a deposit, contact with the bank to ask for an account balance will be classed as activity thus protecting one against the new Act.
‘But it’s my money!’ I hear you cry, and quite rightly so, therefore you still have the option to contact the bank, who would act as an intermediary, and reclaim and outstanding balance with interest should you wish, even if the account is dormant and the money has been used within the Reclaim Fund.
For those of you who may not even be aware there is a dormant bank account out there with your name on it (!), there are companies who, for a small fee, will help locate lost accounts with their owners.
You may suddenly feel the need to spring clean!
For more information on the above topic HMRC have issued the following Frequently Asked Question publication www.hmrc.gov.uk/news/dormant-acc-sch-faqs.pdf or alternatively contact the Taxwise Team at email@example.com, or if you would like to speak direct to a friendly and helpful Consultant contact 01455 852 555.