GBP bank account for US-based people - HSBC Premier Checking?
#1
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GBP bank account for US-based people - HSBC Premier Checking?
Hi forumers,
I run a business and have a good number of clients still in the UK. I'm based in the US.
I originally wanted to transfer all my GBP income into USD to invest it in my new home country, but the continued, well, let's call it "situation" in the UK, has made the exchange rate bad. So, I still have a sizeable amount of GBP sitting in my old UK bank account.
At the moment, it's with Santander. Each time I have to pay a tax bill that involves transferring a chunk of that money out (via Transferwise) so I can pay the IRS, I have to spend hours on the phone with them getting bounced around from department to department, because their process of sending one-time passcodes to non-UK phone numbers works only sometimes. As if taxes weren't stressful enough, this makes it a nightmare. (I just spent 45 minutes on the phone with them today, got sent to the wrong department, and then my call got booted because we hit 6pm and they closed. Rant over...)
So, I need a bank account that's designed for people in our situation, with international affairs. It seems the main one is HSBC Premier Checking. Does anyone else here use that? Are there any alternatives?
There is also the Wise Borderless Account, but I don't think that's the sort of thing I should be keeping a sizeable amount of cash in long-term.
I run a business and have a good number of clients still in the UK. I'm based in the US.
I originally wanted to transfer all my GBP income into USD to invest it in my new home country, but the continued, well, let's call it "situation" in the UK, has made the exchange rate bad. So, I still have a sizeable amount of GBP sitting in my old UK bank account.
At the moment, it's with Santander. Each time I have to pay a tax bill that involves transferring a chunk of that money out (via Transferwise) so I can pay the IRS, I have to spend hours on the phone with them getting bounced around from department to department, because their process of sending one-time passcodes to non-UK phone numbers works only sometimes. As if taxes weren't stressful enough, this makes it a nightmare. (I just spent 45 minutes on the phone with them today, got sent to the wrong department, and then my call got booted because we hit 6pm and they closed. Rant over...)
So, I need a bank account that's designed for people in our situation, with international affairs. It seems the main one is HSBC Premier Checking. Does anyone else here use that? Are there any alternatives?
There is also the Wise Borderless Account, but I don't think that's the sort of thing I should be keeping a sizeable amount of cash in long-term.
#2
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Re: GBP bank account for US-based people - HSBC Premier Checking?
I still have HSBC premier from when I moved, I should move to someone else for that as they've closed almost all the branches, but it works for me for now.
Why would you leave lots of cash in a checking/current account at all?
Why would you leave lots of cash in a checking/current account at all?
#3
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Re: GBP bank account for US-based people - HSBC Premier Checking?
Why would you leave lots of cash in a checking/current account at all?
It's difficult or somehow punitive to invest the money in the UK if you are a "US person", I think. There's too much regulatory red tape so most (all?) UK investment firms won't want anything to do with you.
Doesn't the IRS have some punitive tax on non-US investments?
And, the exchange rate is still pretty terrible (beginning to lose hope on this front, if I'm honest) so converting your life savings in GBP into USD to invest locally in the US is not a great deal at the moment.
#4
Re: GBP bank account for US-based people - HSBC Premier Checking?
You can transfer £ into an account with Fidelity, retain it in £, and invest in anything listed on a large number of exchanges worldwide. You could therefore invest £ in UK shares via Fidelity in the US. Likely, some of the other big brokers provide a similar service. There is an additional benefit that those funds are not considered to be a foreign account (because Fidelity reports them to the IRS) so you avoid all the foreign account reporting reporting issues. Fidelity provides excellent exchange rates so you can easily convert £ into $, or vice versa, as required.
Otherwise you are correct that no brokerage in the UK will accept you as a client as soon as they find out you are a US person. And, yes, the IRS applies punitive taxes to foreign investments but if you invest in individual company shares those are taxed at normal capital gains rates so you avoid all of the PFIC issues.
Otherwise you are correct that no brokerage in the UK will accept you as a client as soon as they find out you are a US person. And, yes, the IRS applies punitive taxes to foreign investments but if you invest in individual company shares those are taxed at normal capital gains rates so you avoid all of the PFIC issues.
Last edited by Glasgow Girl; Nov 26th 2022 at 8:50 pm.
#5
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Re: GBP bank account for US-based people - HSBC Premier Checking?
Thank you so much (to use the US expression!) for this advice! I'll look into this. I didn't know it was an option.
Are you talking about the UK Fidelity: https://www.fidelity.co.uk/
Or the US one? https://www.fidelity.com/
If I understand you correctly - if I buy individual company shares, it's not a big deal, but if I invest in an ETF (or whatever the UK equivalent is - a "tracker fund" I think?), it becomes not worthwhile?
Is that because of reporting requirements? I heard you'd need to fill out a form for every single company in the fund?
Are you talking about the UK Fidelity: https://www.fidelity.co.uk/
Or the US one? https://www.fidelity.com/
And, yes, the IRS applies punitive taxes to foreign investments but if you invest in individual company shares those are taxed at normal capital gains rates so you avoid all of the PFIC issues.
Is that because of reporting requirements? I heard you'd need to fill out a form for every single company in the fund?
Last edited by Dmac_; Nov 26th 2022 at 9:07 pm.
#6
Re: GBP bank account for US-based people - HSBC Premier Checking?
Fidelity in the US.
It’s not just the reporting requirements. Punitive taxation applies to any kind of foreign mutual fund. In the UK those are typically ETFs, index funds, OEICs, Unit Trusts and Investment Trusts. Basically any investment where you are buying a basket of shares versus shares in single company. The reporting requirements are extremely time consuming and complex. One form is required annually for each fund you hold. The IRS estimates 40 hours to complete the form, likely accurate for the first time you do it, nowhere near as long after that but still a significant amount of time per form. That in itself is bad enough, but the taxation of these funds is complex. You can elect one of three methods, the best of which is that you pay tax annually on all dividends and all unrealized profits at the highest published ordinary income tax rate currently 37% (and likely going higher) plus state and city taxes. Losses are disallowed. To do so, you have to elect that method in the year you buy the fund, or else you need to “purge” the investment which means that you calculate the tax owed as if you sold them, prorate the profit over the number of years you held the investment, calculate the tax due for each year at the highest published ordinary income band for that year, and add compound interest to the total for each year you held the investment at IRS interest rates. That adds up fast. Add on the professional help that most people will need to meet these requirements, and you will find you are probably better off keeping the money under your mattress. Don’t invest in any such investments, you will seriously regret it. Individual shares bought from a listed stock exchange are fine, they are taxed at regular capital gains rates.
It’s not just the reporting requirements. Punitive taxation applies to any kind of foreign mutual fund. In the UK those are typically ETFs, index funds, OEICs, Unit Trusts and Investment Trusts. Basically any investment where you are buying a basket of shares versus shares in single company. The reporting requirements are extremely time consuming and complex. One form is required annually for each fund you hold. The IRS estimates 40 hours to complete the form, likely accurate for the first time you do it, nowhere near as long after that but still a significant amount of time per form. That in itself is bad enough, but the taxation of these funds is complex. You can elect one of three methods, the best of which is that you pay tax annually on all dividends and all unrealized profits at the highest published ordinary income tax rate currently 37% (and likely going higher) plus state and city taxes. Losses are disallowed. To do so, you have to elect that method in the year you buy the fund, or else you need to “purge” the investment which means that you calculate the tax owed as if you sold them, prorate the profit over the number of years you held the investment, calculate the tax due for each year at the highest published ordinary income band for that year, and add compound interest to the total for each year you held the investment at IRS interest rates. That adds up fast. Add on the professional help that most people will need to meet these requirements, and you will find you are probably better off keeping the money under your mattress. Don’t invest in any such investments, you will seriously regret it. Individual shares bought from a listed stock exchange are fine, they are taxed at regular capital gains rates.
Last edited by Glasgow Girl; Nov 26th 2022 at 10:05 pm.
#7
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Re: GBP bank account for US-based people - HSBC Premier Checking?
Yikes, that's obscene. Interesting that single stocks are OK... but that's not exactly great for diversification.
Many thanks for the pointers. I'll give Fidelity US a call.
Many thanks for the pointers. I'll give Fidelity US a call.
#8
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Re: GBP bank account for US-based people - HSBC Premier Checking?
I have an HSBC Premier checking account in the USA and it retains its Premier status by virtue of the fact that we keep a £40k income bond invested in our HSBC UK account, then the checking account bounces around quite a bit but often has over £10k in it at one point most months which seems to fulfill the £50k Premier requirements.
When HSBC US started closing US accounts I didn’t realize they would not touch Premier account holders so I looked for an alternative and created a Wise borderless account which works great. Transferring money is extremely easy and I have US and UK bank account routing/sort code and account numbers. I have my Wise US account linked to my US brokerage account for transferring dividends and such and it simply works like a regular bank account. I expect I could do similar in the UK but I have a UK bank account for those purposes.
When HSBC US started closing US accounts I didn’t realize they would not touch Premier account holders so I looked for an alternative and created a Wise borderless account which works great. Transferring money is extremely easy and I have US and UK bank account routing/sort code and account numbers. I have my Wise US account linked to my US brokerage account for transferring dividends and such and it simply works like a regular bank account. I expect I could do similar in the UK but I have a UK bank account for those purposes.
#9
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Re: GBP bank account for US-based people - HSBC Premier Checking?
Yeah, I use Wise Borderless for some business income. Very happy with it, but I think my fear is that it's not protected to the same extent as a "traditional" bank for long-term storage of money.
#10
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Re: GBP bank account for US-based people - HSBC Premier Checking?
A UK payg sim would give you a UK mobile number to link to the Santander bank account and receive one time password text messages. You'd need to get the sim, a family member, friend or business contact in the UK could post it to you.
There are several threads on this with recommendations and other options, e.g.
Keeping UK mobile number
There are several threads on this with recommendations and other options, e.g.
Keeping UK mobile number
#11
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Re: GBP bank account for US-based people - HSBC Premier Checking?
Oh, I have a UK SIM Card. I bought it one time I landed at Heathrow. Perhaps just maintaining that is a good option to avoid this drama, UK mobile stuff is cheap enough.
Interestingly, I just tried top up the UK SIM card that was sold to me as an international traveler at the airport - and the web site doesn't accept non-UK billing addresses. The expat experience...
Interestingly, I just tried top up the UK SIM card that was sold to me as an international traveler at the airport - and the web site doesn't accept non-UK billing addresses. The expat experience...
#12
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Re: GBP bank account for US-based people - HSBC Premier Checking?
I kept my HSBC Premier in the US. You don’t have to keep a high balance, I just set a % of my salary ACH to meet the $5,000 p/m requirement to waive the fees, and then pay some credit cards with it. I had to move away from them as check deposit limits on the app were too low and they closed every branch in the state. I am able to use both US and UK iPhone apps without txts. I think they were used to set up 2 FA app. Not sure the UK one is even premier anymore, but I have online statements with my U.S. address and got the US persons form a few years ago, so they know I am a US person in the US. I use a basic ALLY account for everting online and then a TD bank BEYOND checking with $2.5k minimum for fee free ATM (only go once an month) and bank checks to buy cars and houses etc.
Last edited by tht; Nov 27th 2022 at 5:08 pm.
#13
Re: GBP bank account for US-based people - HSBC Premier Checking?
I have HSBC in the UK and US and moving money is simple. Takes a few seconds.
That said as other have noted there are no real HSBC physical branches left in the USA. There are a couple 'wealth centers' that sell some products here and there but nothing like a normal bank. If you don't need counter service, you can get an HSBC Premier in the US and UK and slide money between the two relatively easily.
That said as other have noted there are no real HSBC physical branches left in the USA. There are a couple 'wealth centers' that sell some products here and there but nothing like a normal bank. If you don't need counter service, you can get an HSBC Premier in the US and UK and slide money between the two relatively easily.
#14
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Re: GBP bank account for US-based people - HSBC Premier Checking?
HSBC has just announced 114 branch closures in the UK next year.
#15
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Re: GBP bank account for US-based people - HSBC Premier Checking?
our local HSBC branch closed and our accounts got changed to Citizens. Subsequently, we closed our accounts!