Yahoo article about Expats, taxes, and renouncing US citizenship

Dragging my DH to the bank is like pulling one's own toenails out with pliers and claiming it doesn't hurt. Almost impossible. He is a hands over the ears "I can't hear you" and/or "I can't be bothered" guy.

We have 2 joint accounts, but the one with most of our funds earns a tiny amount of interest. They called me and said 'come down to discuss'. DH said he didn't want to go, so off I went. They did say I/we could move funds into one of their higher-yield bonds (1 or 2-year no access w/o penalty) but I was reluctant to do that w/o knowing whether it would cause yet more FBAR and tax issues, but they just would NOT discuss any other options.

At this point, we are maybe losing about £1000 in interest per year, but with 2 countries trying to tax penny, I'm no longer sure it's enough loss of income to be concerned about. Aside from the savings account here, our retirement funds are in SEP and traditional IRA's in the US, as well as CD's and money market accounts. If the exchange rate became favorable, I might move money here, but at this point we don't need it, so easier to let it stay where it is.

A reluctance of one UK bank to open an account for an associated USC, currently, is not true for all UK banks, currently.

As far as can be ascertained, an account opened today by any bank carries no guarantee that the account can not be closed in 6 months time. (Good question for termed accounts.)

The discussions taking place to resolve the objections to FATCA include grandfathered accounts, accounts that are already in place and not new accounts, electronic searches of currently held information to establish a US tie verses deeper searches that may need to be done in the future for grandfathered accounts (and at what time in the future), the threshold value of the account that triggers searching, or reporting, etc.

The question is not "can I open a new UK bank account today as a US person" (Vadio excepted), but "will I be able to open a new bank account on 01 January 2013" or is it 01 January 2014?

If an agreement can be negotiated between the US and the 5 EU countries, it appears it will not be a problem. It's just too early to make definitive statements, one way or the other.

Could someone please give me the exact reference that says a UK bank is, by law, required to open a new account for any UKC residing in the UK? 

   

We keep talking about an agreement between the US and 5 EU countries. Here's the joint communique on the HM Treasury site:

http://www.hm-treasury.gov.uk/joint_intl_statement_fatca.htm

There is an exact duplicate available on the US Treasury site. I've yet to look on the French and German equivalents. My French is better than my German, but that's not saying much.

Could someone please give me the exact reference that says a UK bank is, by law, required to open a new account for any UKC residing in the UK? 

   

I'd argue that if the only reason you are refused is that you are a USC then it's discrimination, but what category does it fall under, race, sex, religion.......maybe disability?

Under the Treaty, UK banks are allowed to give the IRS any/all details of an account (information sharing) if there are criminal investigations, possible tax evasion, violation of banking practices, etc. (Additional forms of sharing may already exist.) It's verified in the UK banks Terms and Conditions for all accounts. Fishing expeditions or the mass dump of random personal information is not allowed.

FATCA could require in depth searches of all accounts to discover a US tie, witholding, reporting, requires closure of accounts where any account holder refuses to assist (recalcitrant), and levies high penalties if the bank makes a mistake including the porkies (a criminal offense?) an account holder may make regarding additional citizenships. The US is trying to impose the rules on UK banks to deal with US persons. To comply or not, or to take actions that reduce the cost or risk (close accounts of US persons) becomes a calculated business profit/loss decision. Aside from US actions on US citizens, where is the discrimination?

To get back to the thread topic, a non-US person (renounced US citizenship) should not have a problem. Has Congress passed legislation that forces a USC resident abroad to secure a second citizenship, then renounce their US citizenship, in order to allow that individual to carry on the activities of normal daily life without undue hardship or the fear of excess penalties due to complex legislation?

An initiative started by the last Labour government stated that banks will be legally obliged to provide a basic bank account to all UK residents. You'd need to do some digging to find any articles, but the information is out there.

The financial world would grind to a halt if USC's were not able to open accounts. Think about the countless thousands that spend just a short time in the U.K with or on business... Just not practical. As for refusing account opening to UK/US citizens, more of a sovereignty issue, birth right... Certain legal challenge would persue.

You'd need to do some digging to find any articles, but the information is out there.

I won't be doing any digging, as I think the initiative is not relevant to the FATCA situation. 

The financial world would grind to a halt if USC's were not able to open accounts. Think about the countless thousands that spend just a short time in the U.K with or on business... Just not practical.

I agree it's not practical. But, does the major responsibility for resolution of the problem lie with the rest of the worlds' banks, or the US Congress?

King Canute springs to mind...

King Canute springs to mind...

D*mned sea never does what it's supposed to!