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Discussion Starter · #1 ·
Hi everyone,

I am a dual US/UK national in the UK who recently received a letter from HSBC First Direct to either confirm I am American by sending them a W9 form or to show I'm not American by submitting ID forms like other government issued ID which needs to be certified by a 3rd party (they gave a list of acceptable certifiers, like including postmasters and pharmacists who can certify this, odd or what!!). Have many other Americans overseas especially in the UK else received these requests from their local banks?? When I asked the bank for guidance on which forms to send, they refused to give any guidance on their own request for forms and how I should comply and say I should seek advice from a tax advisor!!

Doing a quick search online, I see that there is currently a lawsuit going on in Canada with a couple people suing the Canadian government for making such requests of them on some infringement of rights basis? Apparently in Canada, one can send their Canadian passport instead even if they are US nationals technically as well, and this way their banks won't start submitting their details to the IRS? I'm wondering if anyone knows the situation in the UK, whether I should actually just send in my UK passport details instead? I worry that once the bank confirms I have US citizenship, this will not only authorise them to contact the UK tax authorities to start disclosing my tax affairs to the IRS, but also that the bank might refuse to renew my mortgage next time around or even not allow me to open any further accounts/products with them. I've been doing my tax returns in both the UK and US for many years so am up to date, but honestly am not sure whether the US ones are always correctly done since the rules are so complex now, especially with how to report foreign accounts. Honest, I would love to give up my US passport except I still have family in the US, but I suppose that's another topic altogether.

Any advice on these requests by UK banks to identify their US customers?? I feel it is a huge invasion of privacy and so heavy handed of the US government to start forcing foreign banks to identify their US customers to the IRS. At the same time, it is extremely annoying and frustrating that UK banks are actually submitting to the US requests without any fight and essentially becoming another arm of the IRS, without any concern for citizen rights at all. I don't see this happening in reverse with US banks having to identify all their foreign nationals and reporting them to their local tax authorities. It seems like a dangerous precedent as well, as there's no telling what banks are going to do or what info is going to be disclosed to the IRS and how that info will be used once you confirm you have US nationality.
 

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The U.K. government has posted advice to account holders here. I'll quote the relevant section:

Responding to questions from account providers

It is important that you respond if you are contacted by your account provider requesting information in relation to an account that you hold (for example, you may be asked for a self-certification of your tax residency status). If you do not respond, the account provider may conclude that you are tax resident in another country based on information it already holds and forward your financial information to HMRC anyway. It may also refuse to open new accounts for you.

You should always ensure that enquiries are genuine and not an attempt to fraudulently obtain your personal information (often referred to as a ‘phishing’ scam) - if you are not sure, check. You can find some advice on how to spot fraudulent activities by following these links –

Phishing | Action Fraud
https://www.bba.org.uk/landingpage/know-fraud/

There is some standard information that account providers already have to ask for under current rules, for example, those aimed at preventing money laundering. Each account provider may choose to design its own form to collect this information or in some cases use an industry standard form, or it may simply be requested as part of an account opening process.

It’s important to note that your account provider will not be able to provide tax advice to you (for example, on your tax residence status) and it is your responsibility to provide accurate information in response to requests for self-certification. If your tax affairs are complicated you may wish to ask a tax adviser to help you.

Is there anything else I need to know?

For most people this is all you need to know....


I'd add a couple points:

1. As that guide mentions, the U.K. government exchanges financial data of this sort in substantially similar fashion with 51 countries. One of those 51 is the United States. (The U.S. was not the first among those 51.)

2. If you're thinking about lying, consider that carefully. Lying to your bank, especially in this matter, may be a criminal offence under domestic U.K. legislation. The U.K. implementing legislation for FATCA is "The International Tax Compliance (United States of America) Regulations 2014," though other, generalized U.K. domestic law may apply to your situation.

3. HSBC First Direct is a bank. U.S. compliance is not particularly complicated if you only have an ordinary bank account and a mortgage. (It might get complicated if you have certain investments such as non-U.S. mutual funds and non-U.S. trusts.) You don't have to report mortgages at all if you're the borrower and as long as no debt has been forgiven, though you may wish to take the mortgage interest deduction on your U.S. tax return. For your ordinary bank account, you have potentially two reporting forms to file annually: FinCEN Form 114 and/or IRS Form 8938. You file FinCEN Form 114 if the total value of your non-U.S. financial accounts (including those you have signature authority over) at any point in time in the year was $10,000 or more. You have a few more weeks before the 2014 report is due as I write this. You file IRS Form 8938 only if two things are true: you are required to file a U.S. tax return and you meet the much higher threshold for filing that particular form. Most people don't meet the filing threshold for Form 8938, but you should simply check if you do/did each year. If you missed filing 2013 (or prior years') FinCEN Form 114 you can presently file back years without any reported penalties as long as you have a reasonable, truthful excuse ("I didn't know" is popular) and as long as the U.S. Treasury hasn't contacted you first about your late filing. You also report the gross interest income from your ordinary bank account using IRS Form 1040 Schedule B, and you can take the Foreign Tax Credit (IRS Form 1116) for non-U.S. income tax paid on that interest income. If you're not already using tax preparation software then I'd recommend it, even a free option such as TaxAct.com or TaxSlayer.com.
 

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Discussion Starter · #3 ·
Who's talking about lying? I'm just wondering if one has dual US/foreign nationality, whether it's necessary to claim the US nationality or whether like Canada it might be possible to just claim Canadian citizenship if you are dual US/Canadian? Also, any idea what the bank will end up doing with the info in the future if you are an American? Will they cancel your accounts or deny you a remortgage as I understand some banks are doing?
 

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You only have to google "FATCA" to find all sorts of reactions, over-reactions and a wide variety of opinions on the subject.

The key thing is that you, as a US citizen, are supposed to be reporting your foreign bank accounts to the US Treasury Dept. every year (by June 30th) electronically from the FinCEN site. It is basically just a listing of your accounts, along with the high balance (in US$) for the year you are reporting. If you're already doing that, then what HSBC is asking for is really no more than what you already divulge in your own name anyhow.

HSBC is likely to be a bit more insistent than some other banks, given that they have recently paid some pretty big fines in the US for breaking US banking law. And if they don't do their "due diligence" to find all their US citizen customers, they are liable to have more trouble with the US Treasury, IRS and banking authorities.

The W9 is a fairly common form - used by the banks to obtain the "tax identification number" (usually the US social security number) of all US customers. (And from now on, probably something they'll require their customers to provide when first opening a new account.) Oddly enough, I have seen advice posted on AARO (website of one of the big US expat groups) saying that if you don't want to disclose your US social security number, you could substitute your US passport number (it has the same number of digits). The same source said that it's also possible to leave the SS# space blank. Not sure how that will work out longer term, but it's up to you.

Basically, what they are going to use this for is to provide information to the IRS (through the national banking authority) on balances and income earned (interest, dividends, etc.) for US citizens linked to their US SS #. If you're already reporting this as required as part of your US tax filings, it's no big deal. If you haven't been filing or haven't been reporting your foreign bank income or information, then you have a decision to make.
Cheers,
Bev
 

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Who's talking about lying?
I was, as a hypothetical. Hence I included the word "if."

What question(s) is(are) your bank asking, verbatim? If (there's that word again) your bank is asking "Are you a U.S. citizen?" or some close variation thereof, there is only one truthful answer to that question.
 

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Discussion Starter · #6 ·
Thanks, Bev. I've just been upset with the bank as well as they will provide absolutely no guidance on their own request for these forms when I ring them for answers. You would think that if a global bank is going to ask their customer for something so sensitive like personal ID confirmations with SSNs so as to potentially be able to send your details to the IRS, they would have trained people to be knowledgable enough to answer customer questions rather than just throwing up their hands and saying they have no responsibility or guidance and they're just following regulations.

BBC Watcher, I take your point as well, but from what I understand from the Canadian example, if a dual Canadian citizen only submitted their Canadian ID documentation then they might be within their rights since the whole issue of being forced to comply with FATCA requests by the local bank seems to be being challenged by some expats in Canada. Seems especially ridiculous for persons who are only US citizens by birth or parentage but never or rarely set foot in the US.

Thanks for pointing me in the direction of AARO too, Bev. It looks like this group asks for annual subscriptions. I assume you think it is worth it as you sound like a member?
 

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I was a member of AARO for a number of years. Was even on the board for a while. It's a good organization and they make quite a bit of useful information available to their members. Another group in somewhat the same vein is the ACA (American Citizens Abroad) which works together with AARO on an annual lobbying visit to Washington DC to discuss various expat issues with Congress. https://americansabroad.org/

AARO seems to offer more nitty gritty "how to do your taxes" kinds of advice. The ACA is perhaps a bit more political and into issue papers and the like. https://americansabroad.org/ Depends on what sort of information you are looking for.
Cheers,
Bev
 

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BBC Watcher, I take your point as well....
Did you?

You don't live in Canada, and you didn't receive an inquiry from a Canadian bank. So why would anything happening or not happening in Canada be relevant to your circumstances? I could replace Canada with Bangladesh, and it'd be the same.

The U.K. has financial data sharing agreements with 51 countries and counting, and it has associated domestic law. You're not being asked anything by the U.S. government on this occasion. You're being asked one or more questions by your U.K. bank under U.K. law. So before you decide to do anything except answer their question(s) truthfully, how about you take a closer look at the governing law?

As the U.K. government's helpful guide explains, your bank cannot provide tax advice or assistance. If their question(s) are confusing or unclear in some respect (are they?) then you'll need to seek advice elsewhere. This forum is one option. You're certainly free to post your bank's verbatim question(s), although I'd recommend removing personally identifiable information.
 

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A few comments:

1. Although there is a lawsuit presently working its way through the Canadian courts Canadian citizens living in Canada who are also "US persons" are in much they same situation as you find yourself in the UK. The Canadian banks are also presently hunting down US citizens amongst their customers so they can relay their account details to the CRA which will, in turn, pass that info on to the IRS. The lawsuit is attempting to stop the violations of Charter and privacy rights resulting from the Canadian government's signing of the IGA with US Treasury. It is possible there will be an injunction preventing the CRA from transmitting data until the lawsuit is settled, a process which may take years. Presently the only Canadians who are safe are the ones without a US birthplace.

2. Assuming you are up to date on your US filings the information HSBC may pass on to to the UK revenue agency (sorry, I can't remember the acronym) for transmission to the IRS won't be anything the IRS doesn't already know. The greater worry is that HSBC may use that knowledge to eliminate you as a customer once they have discovered your "US personhood". Presenting a non-US passport is of no use if it shows a US birthplace. This process has already started in Canada as some institutions are now refusing customers with any US connection.

3. In view of the fact HSBC has refused to give you any guidance on exactly how you should respond, it seems to me they are inviting you to be a bit creative. Some sort of ID which establishes that you are a UK citizen resident and paying taxes in the UK but doesn't show a US birthplace should do the trick. (Hopefully you are on good terms with your postmaster!) As long as you don't actually lie you should be OK. On the other hand, if they already have information documenting your US citizenship, there is really no escaping that fact. Have you tried "update my personal profile" on HSBC's website to see what they have on file for you?

4. Some try to put a pretty face on it but the fact of the matter is that the US is trying to tax people who are the resident taxpayers of other countries, i.e. expand its tax base beyond its borders. It is wrong, shameful, and needs to be resisted at every opportunity by all means possible. The US won't reciprocate on this because it would be pointless; other countries generally don't try to tax their non-resident citizens. Besides, the US doesn't reciprocate on much of anything, anyway. As Bev likes to say, "you are preaching to the choir, here."

5. The fact that you still have family in the US doesn't prevent you from renouncing US citizenship if you never intend to live there again. Once you are solely a UK citizen you will be able to travel to the US on your UK passport just like any other UK citizen. There is a bit of fear-mongering going around on that subject but its all hypothetical. Depending on how the UK banks ultimately react to this FATCA fiasco its possible you may not have a choice in the end.
 

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Assuming you are up to date on your US filings the information HSBC may pass on to to the UK revenue agency (sorry, I can't remember the acronym)....
HMRC.

The greater worry is that HSBC may use that knowledge to eliminate you as a customer once they have discovered your "US personhood". Presenting a non-US passport is of no use if it shows a US birthplace. This process has already started in Canada as some institutions are now refusing customers with any US connection.
Canada is not the United Kingdom. The U.K. doesn't have a "charter," for example.

Several posts back I looked for credible reports of HSBC First Direct closing the accounts of U.S. citizens who are resident in the U.K. and who responded truthfully to HSBC's inquiries. I can find no such reports of account closures. As mentioned, HSBC already has 51 countries' worth of reporting to HMRC under domestic U.K. law (acts of Parliament, in Westminster). Even HSBC is not in the habit of closing accounts for ~51 countries' worth of citizens who are U.K. resident.

If you can find a credible report otherwise, please post a link.

The only reference to account closures I could find is in the U.K. government's advice that I linked upthread. The U.K. government indicates that banks are likely to close accounts when the account holder does not respond or does not respond truthfully to their inquiries.

I don't think this is actually complicated. To summarize, a U.K. bank is asking its U.K. resident customer a specific question (or questions) as required under U.K. law. The customer has three choices: (1) Ignore the inquiry (and, according to the U.K. government, risk account closure); (2) tell the truth (and, according to the best available evidence, keep the account, possibly with foreign tax and financial reporting consequences that already exist); (2) lie (and consequently possibly commit a felony under U.K. law and/or risk account closure). Take your pick.

Once you are solely a UK citizen you will be able to travel to the US on your UK passport just like any other UK citizen.
Yes, for now, and with absolutely no legal right of entry into the United States. Only U.S. citizens (and U.S. nationals) are legally guaranteed admission into the United States, and only documented U.S. citizens/nationals can make that legal right operable. (Like anyone else they might be arrested upon arrival if there's an outstanding warrant, but they are guaranteed entry.)
 

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OK, before we get too far afield on this, let's consider the original question posed here.

Publicity about FATCA and all the FATCA related stuff is much, much greater in Canada (due, I suppose to the proximity) than just about anywhere else in the world outside the US. Unless you are particularly tuned in to the US expat community media sources, it's entirely likely that hearing about this "you must give us your US SS number" comes as something of an unpleasant surprise - and indeed some expats who have drifted off the grid altogether may be concerned that it is some sort of a scam.

Also HSBC has been somewhat pro-active in pruning "problem" customers from their rolls. It must have been five years ago now that I got notification from HSBC that they were going to close all savings accounts (at least in my branch) held by "overseas residents." Since I also had a current account (in the UK, this is), they were supposed to just roll the balance of my savings account into my checking balance. Don't know what happened, but two years later, I still had two accounts in the branch just like always.

Ultimately, I shifted both accounts to my French bank anyhow. And still have yet hear anything from my French bank about needing to fill out a W9 or any of that nonsense. I've always reported my foreign accounts, so it really doesn't matter one way or another to me. These days, bank accounts don't generate enough interest to make a difference, certainly not on my US tax returns - and besides, the one "taxable" account has French taxes deducted at the source anyhow. And at least according to one tax attorney at the AARO, it's perfectly valid to refuse to disclose your US SS#, even on a W9 form. (After all, the W9 does NOT go to the IRS - it is supposed to be held by the bank or other institution that requested it. In these days of identity theft, apparently it is considered a valid concern.)

Yes, it's a pain in the patoot. And yes, to many of us, it appears to be "wrong" or "immoral" or whatever other adjective you want to use to describe the situation. There are, however, ways to cope, up to and including renunciation, if you feel strongly enough about it. The US expat groups have their own ideas, and those are worth looking into (as well as being a whole bunch less expensive than renunciation at the moment). And there is always partial- or non-compliance, where it is up to you to assess the likelihood of getting caught, given the IRS statistics on audits.
Cheers,
Bev
 

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Discussion Starter · #13 ·
Thanks, Maz57. The fact that FATCA is being challenged in Canada is why I was asking about the UK situation, in case anyone knew if it was also being challenged in the UK or anywhere else in Europe or if there were any similar loopholes. I should think someone could/should take the issue to the European Court of Human Rights, it's just completely overreaching on the part of the US government as far as I'm concerned. I don't know why BBC Watcher seems to think it is such a black and white issue beyond challenge.

Saying that, I don't think I have options to be creative as my UK passport shows my US birthplace. The HSBC people couldn't or wouldn't promise nothing would happen to my future as their customer if I confirmed I was American. On the other hand, in the paperwork they do threaten to close your accounts if you don't respond! I really am going to have to consider the renunciation option at some point as the reporting/filing requirements are just driving me mad every year and taking up too much time. I'd like to perhaps start my own business one day too, and the thought of having to file under that situation as a US national scares the heck out of me. Having family still in the US is the main barrier too however as another complicating factor is I don't know what the implications are say if a US family member dies and leaves you property/assets and you're now longer American?
 

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I wouldn't get too concerned (just yet, anyhow) about the possibility of opening your own company in the UK. How much you need to report is tied to just exactly how you have the company set up (i.e. some form that the US recognizes as a "corporation"). And, as with all things in the realm of taxation, the rules could change within the next few years.

They also need to be very careful in taking the FATCA issue to court anywhere in the world. Many of the "gripes" about FATCA and the US system of taxation are based on "it's too much work" or "the forms are too confusing" whereas the purported purpose of the legislation is to fight against global tax evasion. The anti-tax evasion and anti-money laundering movement is getting stronger all around the world, although different countries have different ways of handling it.

Purely personal opinion here, but I think the folks looking to get out from under the worst effects of FATCA need to focus on the duplication of control and usurpation of authority - i.e. that their accounts are already subject to control and review by their country of residence. Anyone living in a country without banking oversight or with no national level income tax, or living in a known tax and banking haven won't be covered by that argument.
Cheers,
Bev
 

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What question(s) did HSBC First Direct ask you, USExpat111? It's really hard to provide advice on how to answer a question when we still don't know the exact question.

A ECHR case? Well, good luck to the individual or group that wants to try that...50-odd countries and years/decades after U.K. law started requiring such reporting to HMRC (and Inland Revenue before that).
 

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OK, I found out what HSBC First Direct is telling its customers. That's because First Direct has published a rather helpful Q&A guide here.

The most interesting and relevant Q&A is probably this one, quoted in its entirety:

What will first direct do if I do not provide the information required under FATCA?

first direct is committed to being fully compliant with FATCA.

first direct may not open new accounts or offer additional products and services to customers who choose not to comply with first direct's requests for documentation to establish a customer's status under FATCA.

first direct may exit the relationship with customers who decide not to provide the necessary information and documentation within the regulatory timeframe.

first direct may also need to report information about customers who do not provide the required documentation to us.


Not confusing.
 

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Discussion Starter · #17 ·
Yes, I agree, Bev, another reason I'm so annoyed is that the foreign banks are submitting to an authority from another country (the US) seemingly without any question or regard for their customer's rights. Where's the UK Data Protection Act when you need it??

BBC Watcher, HSBC didn't ask me questions per se, they've just sent letter asking me to send back forms depending on my situation- W9 if US or the other W9 form plus other certified documents to show non-US ID if you're not US. I am guessing they've sent me these as I ask them every year for interest income statements for the US tax year, and I tell them I'd like them because I'm American and need statements for my US tax returns. I do the same with other UK banks too, but HSBC is the only one asking me forms for FATCA.

I like the idea of using the US passport ID rather than giving out the SSN, thanks Bev. It's either own business or self-employment I'm thinking of, but the thought of having to file yet more US tax forms and spending much more time than I already do trying to figure them out gives me a headache and puts me off from going in that direction just yet.
 

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....HSBC didn't ask me questions per se, they've just sent letter asking me....
What does the letter say? Just grab the letter and quote from it, directly.

Passport numbers? Bad idea, in my view. I always wonder why so many purportedly honest people go out of their way to act as if they're guilty. Doesn't anybody else remember the important lesson Richard Nixon taught us?
 

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Discussion Starter · #19 ·
Yes, BBC Watcher, I've already pointed out that HSBC is also threatening to close accounts/relationships of persons who don't respond to their requests. Talk about heavy-handed and over-reaching US authority, this is what I'm also griping about. I wish some group in the UK or Europe would contest FATCA and hope someone does eventually, but the UK is definitely the US's poodle when it comes to things like this...
 

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Discussion Starter · #20 ·
The letter is too long to quote, I've given the gist of it already, BBC. If tax attorneys and AARO are saying it is acceptable to use passport numbers instead of SSN, why do you suggest it's not? I don't know if you've ever experienced ID fraud or people stealing your home address or other personal details, but I've experienced the latter and I'd really rather not give out my SSN if possible.
 
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