Questions Of Cash: I'm seeking an ethical home for my money

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The Independent Online

Q I have been awarded arrears of disability living allowances part of which I would like to invest in a savings account with an ethical bank. My IFA has provided details of Triodos Bank, which is Dutch and seems young, but I am unclear about the deposit guarantee arrangements. I don't know whether to use Triodos or the Co-operative Bank, which is also ethical. KH, London

Triodos is a respected ethical bank, founded in the Netherlands in 1980 and has operated in the UK since 1995. Both Triodos and the Co-op Bank adopt ethical policies, but differently.

The Co-op operates negative screening to avoid using customers' deposits for unethical purposes. Triodos adopts positive ethical criteria for how customers' deposits are used. Savings rates vary according to the type of Triodos account used, and may not always be competitive.

Deposits are protected by the Dutch collective guarantee scheme, which is similar to that of the UK deposit protection scheme.

Q We are thinking of selling our property in Spain after 23 years' ownership. Can we keep the funds in an account in Spain, drawing from it by debit card anywhere in the world? Or can the money be placed in an offshore account? ID, Newcastle

If you are UK residents you will have to declare capital gains on the property to the British Inland Revenue and these will probably be subject to capital gains tax. If you do this, it does not matter where you deposit the funds.

Glenn Martin, of the accountant Moore Stephens, says: "You could deposit the proceeds in a Spanish or other offshore bank account, but interest credited must be included in your annual UK tax return(s), assuming you are resident and domiciled in the UK. Credit will be available against your UK tax liability for any local taxes paid." You should take advice on the tax implications of selling your property. Establishing the amount of local tax and CGT payable and may be affected by indexation relief prior to 1998, taper relief since then and other complications.

If you have questions about personal finance, write to Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk. We regret that we can reply only to letters published here. Please send copies, not originals, as we cannot return material.

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