Lloyds Banking Group share offer

As a dual citizen living in the UK would I get penalties from buying Lloyds shares when it gets sold to the public?

It did say this at the bottom, but not sure what to make of it tax wise:
This notice and its content are not and should not be deemed to be an offer or invitation to engage in any investment activity. The securities have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the U.S. absent registration or an exemption therefrom.

You've probably got an 8938 & FBAR reportable asset and US tax on any gains...we'll have to wait to see if like NS&I US persons are simply barred from investing at all.

Just to clear up NSandI - a US citizen can invest in NSandI provided they are UK resident for tax purposes.   My wife and I opened a joint account and used a notarized copy of her US passport as a form of ID when opening the account.

Just to clear up NSandI - a US citizen can invest in NSandI provided they are UK resident for tax purposes.   My wife and I opened a joint account and used a notarized copy of her US passport as a form of ID when opening the account.

It varies depending on the product.  Direct Saver t&c, for instance, have been altered to exclude US Persons. 

Under "Who may open an account":

. General limitations
Accounts cannot be:
(a) opened by a person who is either a US citizen and/or
a US resident for tax purposes;

http://www.nsandi.com/files/published_files/asset/pdf/direct-saver-brochure.pdf#page7

NS&I publicly threw out all of their US person customers in the Spring of 2014.

The terms & conditions of most of NS&I accounts exclude all US citizens from investing. This is a policy decision to save NS&I the cost of the FATCA reporting that is required from all other financial institutions.

NS&I publicly threw out all of their US person customers in the Spring of 2014.

The terms & conditions of most of NS&I accounts exclude all US citizens from investing. This is a policy decision to save NS&I the cost of the FATCA reporting that is required from all other financial institutions.

Direct ISA accounts are okay, as cash ISAs aren't reportable.  Only Direct Saver accounts were closed as I recall.

NS&I publicly threw out all of their US person customers in the Spring of 2014.

No, they didn't.  There are still US citizens who are UK residents and have retained their pre-existing NS & I accounts.

No, they didn't.  There are still US citizens who are UK residents and have retained their pre-existing NS & I accounts.

There are probably even some UK-resident US citizens who still have Direct Saver accounts, as there may have been no US indicia on the account (no place of birth for example).  They never contacted me about my DS account.  I closed it myself when I learned about the change in t&c. 

Sorry I should have written that NS&I SAID that they threw out all of their US person customers for the accounts that stopped accepting US persons. They actually only closed 2,700 accounts (out of tens of millions). Draw your own conclusions about how hard they looked for US indicia.

Most Direct Saver accounts were probably opened soon after it first became available, which was just around the time of the banking crisis.  Place of birth was not required until FATCA came along, so the information would not be on NS&I's records.

Worth bearing in mind that NS&I is not a normal bank but an instrument of Treasury policy.  I imagine the effects on NS&I operation would have formed part of the IGA negotiations.  No doubt it was agreed that for FATCA purposes it wasn't necessary for NS&I to waste taxpayer money upgrading software systems, seeking self-certification, etc, especially as many NS&I products aren't even subject to taxation.  So NS&I are "deemed compliant" and, within UK law, will do what suits the Treasury.

It will be interesting to see what changes, if any, appear at NS&I with the implementation of the Common Reporting Standard.

It varies depending on the product.  Direct Saver t&c, for instance, have been altered to exclude US Persons. 

Under "Who may open an account":
http://www.nsandi.com/files/published_files/asset/pdf/direct-saver-brochure.pdf#page7

The brochure is wrong.   We opened a direct saver and I told them several times I am a dual citizen and my wife is a USC, and we even sent a copy of her US passport for ID purposes.   Everyone at NSandI told us that provided we remain UK resident we can open any of their accounts.

The brochure is wrong.   We opened a direct saver and I told them several times I am a dual citizen and my wife is a USC, and we even sent a copy of her US passport for ID purposes.   Everyone at NSandI told us that provided we remain UK resident we can open any of their accounts.

Aha!   

Thanks for that information.  That suggests I probably won't have a problem renewing my savings certificates when they mature next spring.  (Hoping to have my CLN by that time, as I've recently renounced, but the wait times seem to get longer and longer.)

The brochure is wrong.   We opened a direct saver and I told them several times I am a dual citizen and my wife is a USC, and we even sent a copy of her US passport for ID purposes.   Everyone at NSandI told us that provided we remain UK resident we can open any of their accounts.

I asked the Chancellor of the Exchequer for his comments. The response I received from the "Debt & Reserves Management Team" at HM Treasury includes the following words:

"*US customers can continue to hold NS&I products which are tax free. (US lottery and gaming laws already prevent US residents from holding Premium Bonds)
*US Customers can continue to hold non-taxable products as these are exempt and no reporting is required.
*Customers who are resident and not citizens can self-certify using a W8 form."

According to the Treasury who run NS&I, taxable accounts cannot be held by US persons; which is what the Terms & Conditions say.  It sounds as if the staff on the frontline at NS&I are not adequately trained.  I have had other people challenge this and the Directors at NS&I are it seems aware of Treasury policy, but not their more junior staff.

Thanks for this, Guya, and for your efforts to clarify the situation. You, perhaps more than anyone else on this forum, understand the difficulty of the term 'resident' and its implications for a USC. Several of us have made similar inquiries, but always to the lower, front line staff. The one certainty, both from those we communicate with and in the composure of the NS&I written Terms and Conditions, is the lack of definitions of 'resident' and 'US customers'. Not to be critical, but I find the same lack of definition of US customer and resident in the responses from HM Treasury, above. The exact meaning of the word 'resident' is never adequately defined. UK resident? US physically resident? US resident for tax purposes? 

According to the Treasury who run NS&I, taxable accounts cannot be held by US persons; which is what the Terms & Conditions say.

This, although somewhat clearer, still leaves a question. Taxable where? Taxable in the UK, or taxable in the US? If the assumption is not taxable in the UK, does this mean a cash ISA is allowable if held by a USC even though it is taxable in the US (ISA rules demand they must be resident in the UK)? Or does it mean taxable in the US? (A guess would be taxable in the UK.)

I've had several requests from banks and building societies for W-9 information. One went to all possible extremes in attempt to answer the question "why am I considered a US Person". It may have gone too far, since one explanation defined US citizenship. It used the language of the IGA, but didn't consider all possibilities for every individual.

The information sent by one building society was less adequate, and if I were not aware of FATCA (such as an accidental American) and reading their explanations, I would have been tempted to respond with "this doesn't concern me". It appears not only NS&I, but many of the smaller institutions are struggling. I must confess my dealings with this particular institution was a bit of a trial run. Front line staff, when questioned about my 2nd (American) citizenship responded with "that's not important, it's just for tax reasons so we'll leave it blank". Six weeks later, I had a request for my TIN, from head office, with the assumption I might have some connection with the US. (I opened an account many years ago with a US passport, my only citizenship at the time.)

For those curious about account balances, all demands for W-8BEN/W-9 have come from institutions where more than $50,000 is deposited. There are others with $50,000+, and so far, I have not heard from any of them. They, also, were opened many years ago with a US passport. (And yes, the IRS is already aware of all of them, via Sch. B, 8938, and FinCEN 114.) 

I think the non-reportable NS&I accounts are all listed as exempt products in Annex II of the IGA:

• Individual Savings Accounts (ISAs) - as defined in the Individual Savings Account Regulations 1998 (SI 1998 No.1870) and subsequent Amendment Regulations
• Junior ISAs - as defined in the Individual Savings Account Regulations 1998 No.1870, and subsequent Amendment Regulations
• Child Trust Funds - as defined in the Child Trust Funds Act 2004 and subsequent Amendment Regulations
• Premium Bonds - where issued by NS&I (UK National Savings and Investments)
• Children’s Bonus Bonds - where issued by NS&I (UK National Savings and Investments)
• Fixed Interest Savings Certificates - where issued by NS&I (UK National Savings and Investments)
• Index Linked Savings Certificates - where issued by NS&I (UK National Savings and Investments)

Which makes it unambiguosly clear that holding one of these accounts won't make one "recalcitrant" but doesn't shed much light on whether NS&I might close the account or decline the application.

On the strength of recent postings in this thread I've applied to (re)open a Direct Saver (which is both UK-taxable and US-taxable).  We'll see what arrives in the post - a Welcome pack or a W8-BEN.