Euro bankers draft - offshore bank

What I meant to ask is: Is it possible to pay for a house purchase in Italy using a bankers draft in euros, drawn on an offshore bank - in this case LloydsTSB located on the Isle of Man.  We are not overly keen in transferring the money to Unicredit right now...  

Yes, you can but you must have the agreement of the notaio and the vendor, who may ask that the cheque is banked and credited to his account before the act - which is a risk the buyer takes.  The notaio may carry out further cheques on the validity or not of your bankers draft.   However the law and accepted practise require traceable money from an Italian bank account - so while your vendor may be worldly enough to realise that other banks exist they dont have to accept a cheque that way...  

we also have an IOM Lloyds Eoro account and regularly transfer from their to our Unicredit account in Italy, what's your problem with Unicredit, they're not going bust anytime soon. A transfer will take a couple of days and cost you about €20, and you can then get a counter cheque from your branch....simples...!!

Just to echo Flip, I would think your money is a lot safer in Unicredit than it is in Lloyds, given its a basket case propped up by the taxpayer who have the dubious pleasure of owning 44%. Italian banks were not exposed to the meltdown in the same way as UK banks who managed their affairs with all the aplomb of a lifelong member of gamblers anonymous. Transfer your money as Flip says and enjoy your new home. C  

We acepted a bankers draft drawn on a Belgian bank in Euros and it took 3 weeks to clear. If we had known this we would not have accepted it. I think you'll be lucky if you find anyone to accept it to be honest. There have been no issues with Italian banks here. I would transfer it.

When I bought my place [9 years ago now] the estate agent sorted out with the sellers [husband and wife] how they wanted to be paid at the Notary's office when we signed all the paperwork.  They would not accept anything other than Italian Bankers Drafts   The net result was that I paid in the following format:- One ‘non-transferable’ Italian Bankers draft for the declared value of the property Several ‘transferable’ Italian Bankers draft for the remainder - divided 50/50 between the sellers, and each was for less than Euros 10,000. [I understand this is because anything over Euros 10,000 going into a bank account triggers the taxman] Being transferable - they probably never went into the sellers bank account, but were used to purchase goods/services from others.  [I’m not sure whether ‘transferable ‘ bankers Drafts still exist in Italy today] Also paid Euros 200 for central heating oil by Italian cheque, with the name of the 'recipient' left blank , so the seller could use it to pay for something. All the 'transfers' took place in front of the Notary [he was paid by cheque

Hi Pamela where on the island are you buying?

Thanks for all your responses on this. One further question - is it possible legally and practically for the monetary transaction for the purchase to be made by an electronic transfer from our UK offshore euro account direct to the vendor's Italian account? 

Yes if you can guarantee when it will arrive and the notary and vendors are happy to accept it.

Yes but - it depends where your offshore account is.  If it is on a blacklisted country not only is it illegal but it also falls into the scudo fiscale legislation which can make you liable to large tax surcharges.   Alan H story is interesting but bear in mind that with the change in the laws underdeclaration is illegal and heavily punished.  There is no fiscal advantage in underdeclaring for the buyers.  Dont do it, they will find out. 

Basically yes - it depends on your bank.  Some are very efficient and you can do the trasnfer in front of the notaio and he is satisfied.  otherwise you technically have to do the transfer before the signing of the atto, and produce the receipt of transmission for the notaio.  Some notaios will also demand that the money is received by the seller before the act is signed - so there are lots of phonecalls in the notaios office.   A notaio cannot receive your money (in escrow) and then send it on.  Is your bank a euro bank?  The other way out is to transfer the money to am FX company (I can recommend one wholeheartedly) who have all the details of the recipients bank account.  They forward the money when you call and tell them to do so, in front of the notaio and send an email immediately showing the it has been done.  However it all has to be done with the consent of the vendor.  Also bear in mind that a foreign bank transfer costs the recipient money - sometimes a percentage of the amount, so you will have to add 0.15% to the money you transfer to the seller - if its over 50.000 euro.

I'm not sure that is 100% correct. I can't find anything that says it is illegal to transfer money from a blacklisted country. BTW Isle of Man, Jersey & Guernsey are all blacklisted. The Scudo Fiscale is a scheme for 'regularising' income held abroad (in whichever country) whereby tax has not been paid on it and you want to return it to Italy. Obviously the above countries could fall under this scheme but so could money held in the UK/US etc. Anyway - the Scudo Fiscale would only be relevant to a tax resident of Italy and not someone resident in the UK buying a house in Italy. There is a reporting requirement for all monies/invoices traded with entities registered or domiciled in blacklisted countries but that only applies to holders of Partita IVA. I'm happy to be corrected if someone can find the relevant legislation.

As far as I understand it, bringing in money from a blacklisted country opens you up to the laws on antiriciclaggio - and if the money was going straight into the vendors account they could end up in trouble with the agenzia dell'entrate.  I would check with my notaio but he's still on a beach somewhere.   I am happy to be proved wrong though :)

I would like to know. I wonder if the rules apply to entities and persons domiciled in those countries rather than bank accounts in those countries. Can anyone shed any light?

Penny, BTW Isle of Man, Jersey & Guernsey are all blacklisted. If you are referring to the OECD list of uncooperative tax havens (commonly known as the "blacklist") that is incorrect. All three now meet agreed international standards and rank on a similar basis to the UK, US, France, Germany etc.  

Hmmm not sure Capo Boi as on apparently the Italians still use a list from 2007 which I believe was the last proper 'blacklist' produced as this term is now defunct. I'll have to find the source I got that from and post it here.

If you Google search: elenco paesi "black list" 2011 you will get lots of repsonses. Here is one http://www.tasse-fisco.com/societa/comunicazione-black-list-white-domand... and those countries are still on the list for Italy I'm afraid. Ram - I can only find a reporting requirement on any transaction with entities registered or domiciled in blacklisted countries so IMHO the buyer would need to be resident in Jersey for example for there to be a problem. Maybe your Notaio could confirm?

Sorry Ram - forgot the link: http://www.tasse-fisco.com/societa/comunicazione-rapporti-fiscalita-priv...

Penny, We are talking about two different thing here. The legislation that you point to is essentially business to business and here Italy is no different to most of Europe. Its predominately to stop tax allowances and deductions being applied by Italian companies overseas subsidiaries where there is no rational economic interest for doing so. On a personal level, provided that you are not a suspected (and can prove) drug dealer, money launderer, "tax evader" etc, you can freely transfer money in and out of Italy to IOM, Guernsey etc. without any withholding taxes being applied. Switzerland is on the Italian "tax and fiscal" list, "(blacklist"), but probably the biggest personal buyers of Italian property in the last three years have come from Switzerland.

Capo Boi, I was disagreeing with RAM :-) "I'm not sure that is 100% correct. I can't find anything that says it is illegal to transfer money from a blacklisted country. BTW Isle of Man, Jersey & Guernsey are all blacklisted." "There is a reporting requirement for all monies/invoices traded with entities registered or domiciled in blacklisted countries but that only applies to holders of Partita IVA." Italy keeps two 'blacklists' (one for business transactions and one for personal transactions) and the Channel Islands are on both of them as the Italians by their own admission use an old list from 2007. But as there doesn't seem to be any legislation that would affect a house purchase it is kind of irrelevant anyway. Any financial transfers to or from abroad over €5000 are reported by your bank and I had to declare any money transferred to or from abroad - a new requirement that I have never had to do before this tax return. In Italy, if the taxman thinks you may be avoiding tax then the onus is on you to disprove it and not the taxman to prove it. Therefore you guilty until proven innocent. This has recently been upheld by the Italian courts.

A very useful post Penny. This is my understanding as well and was what I was trying to say. You just write much better than me.