RidiculousLife

Ive been in USA for almost ten years now.

But i have savings in the UK. When I left the UK, the savings were in a high interest, UK taxable account. A couple of years later that account matured, so I opened a new account, and have had the money in there ever since.
Recently I noticed, when I came to renew the account (it has matured again and let me tell you it is no longer high interest either, but anyhoo...), I noticed that the requirements for having a savings account are to be a UK resident, which I obviously am not.

Does this mean that I must close the account? Are non residents not permitted to have money in the UK? Seems odd... Its not a huge amount, but its my little nest egg that I saved over my entire life and since the sterling is stronger than the dollar, I just like the security of having it there for the time being.

Am i breaking a huge law? Should I close it and transfer it to USA? I've always used a UK address to deal with all my UK business, but that doesnt mean that Im a UK resident and now I am worried.

All advice and recommendations are welcome. Especially to put my mind at rest.

TIA

quiltman

Most Uk banks/building societies won't care where you are so long as you have a UK address.
We live in the Philippines, have kept our UK accounts but changed the address to a friend of ours. The Building society know we live here and are happy so long as they have a UK address - not a PO Box - to send mail to. We get a couple of letters a year - including the AGM papers.
If you don't have a UK address then I'm not sure if the rules allow overseas investment in a UK based savings scheme. The UK will deduct the 20% tax and advise HMRC , but if you invest in one of their offshore accounts - for Nationwide it's Nationwide Isle of Man,- then you get interest paid gross and it doesn't matter where you live as it's up to you to declare the income in your country.

Owen778

These are bank internal rules, not laws.

I retained my accounts with Barclays when I moved to the US. They allowed me to use a US address just fine, the only problem is that their staff are not allowed to call customers on international numbers, even though they were allowed to add it to their system.

Also, make sure you are filing the FBAR and 8938 (FATCA) forms for tax reporting, if your total foreign financial accounts are over the thresholds. ($10k for FBAR, more for 8938).

I'm not sure what sort of account you have though, as anything I'd call a "savings account" in the UK wouldn't mature.

Cook_County

Unless the terms and conditions of the account prohibit US persons you can remain with the account.

mamasue

I've had a NatWest account for a hundred years, a current account and a savings account.
NatWest are fully aware that I moved to the US almost 8 years ago, they send my mail here... even though I've gone paperless!
One thing they won't do is transfer money to my US bank, unless I write them an actual snail-mail letter, pretty useless if you need it in a hurry.
BUT....HSBC will transfer money, so I have to transfer money from my NW account to my very-small HSBC account, and get it sent from them to my US bank, with no hassle!

Married2abrit

My husband's account has just been closed by NS&I because he is a US citizen and they stated in their letter to him (which accompanied a check for his account balance) that the cost of them reporting these accounts to the US government outweighs the benefit of keeping them open.

Yorkieabroad

Oh, that's a pain....I've got quite a few NS&I products......I'd been keeping my head down and fingers crossed that that day would not come. I've not got the letter yet, but guess it will be on it's way

Out of interest, did they close fixed term bonds straight away, or are they allowing them to run to maturity and then closing them?

JAJ

Except that they probably are only closing the accounts of U.S. residents, not U.S. citizens. (despite what they say). Also, they wouldn't have to report anything to the United States. Under the agreement with the United Kingdom on the U.S. Foreign Account Tax Compliance Act, they'd report it to HMRC (which they already do ... )

NS&I might be trying to gain exemption from reporting based on being a U.K. financial institution with a local client base. These institutions have to close U.S. person accounts if the account holder is non-resident in the United Kingdom, however they cannot legally refuse to do business with U.S. persons that do live in the United Kingdom.

They will probably find that the cost of all this exceeds the cost of simply capturing a U.S. Social Security Number and then reporting that to HMRC (they generally don't have to report anything under $50k).

As for the mainstream banks, Barclays, Lloyds, HSBC, trying to avoid doing business with United States persons is not practical so they will be asking for U.S. tax identifying information on identified accounts and sharing that with HMRC. They have already changed their terms and conditions to allow them to do so.

theOAP

I agree. The IGA deemed compliant, local client base leads to some strange circumstances. NS&I will open an account if the USP is resident in the UK, has a UK bank account, and files with HMRC, but will have to constantly monitor all those accounts. If it finds that someone is no longer resident the account must be closed and reported in the regular FATCA fashion. So, it must still do all the monitoring, and possibly some reporting. Does the overall cost of compliance vary greatly if the number of accounts are 300 or 3000?

Even more enjoyable is the fact that a High Street Bank with a USP account must report if the account has $50,001 in it (or it may choose to report any and all accounts, even those under $50,000), yet the maximum that can be held in an NS&I Direct Savings account is £2 million. That's $3.4 million. So, an account with $50,001 (or possibly less) invested is reported, and an account with $3.4 million is not reported.

Married2abrit

Yorkieabroad,

My husband says he didn't have bonds just savings through NSI (he is 43). The letter that was sent with the check that we have to endorse specifically stated that he had to prove to NSI that he did not have US citizenship (which he has) and that he was not residing in the US. That is all I know, so I hope that information is helpful to you.

On another note, free emergency treatment on the NHS if you are in the country apparently stopped in 2010. I had to go to the hospital there in April for suspected kidney stones and have just been sent a bill of 875 pounds even though every staff member we spoke with said "it's an emergency, you are covered as a visitor". Ugh.

Yorkieabroad

Thanks for that. I don't have any straight savings accounts, but do have a "ladder" of bonds. I guess if they close them all now, I may not be able to get an equivalent interest rate, but at least the exchange rate isn't bad!

Interesting that they are asking him to prove the negative.....always curious how to do that....letter from Obama?

JAJ

If they are fixed term deposits, it may be illegal for NS&I to close them before maturity. However, if they try, you will have to decide what if anything to do. Either in terms of legal action and/or complaint to your MP, since NS&I is government owned. On the other hand, you may be happy to get your money back.

Normally self-certification in the form of a W8-BEN and either a Certificate of Loss of Nationality, or a reasonable explanation of why one is not held. But since it looks like NS&I is really targeting U.S. residents, being a non-U.S. citizen in itself wouldn't help.