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Non Resident Alien and the FATCA rulings

Non Resident Alien and the FATCA rulings

Old Sep 25th 2014, 6:07 pm
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Default Non Resident Alien and the FATCA rulings

Hi,

I have been following this with interest:
'I was terrified we'd lose all our money': banks tell US customers they won't work with Americans | Money | theguardian.com

Posting for the information of others as well as for information on the following:

Does anyone know whether this affects non-resident aliens or is it only those with greencards/passports?
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Old Sep 25th 2014, 6:12 pm
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Default re: Non Resident Alien and the FATCA rulings

Originally Posted by sherbert View Post
Hi,

I have been following this with interest:
'I was terrified we'd lose all our money': banks tell US customers they won't work with Americans | Money | theguardian.com

Posting for the information of others as well as for information on the following:

Does anyone know whether this affects non-resident aliens or is it only those with greencards/passports?
It affects anyone with a link to the United States I believe. For example, if me and my USC wife live in the UK, how does the bank know my wife is American? I certainly haven't declared my citizenship to the non-US bank accounts I hold, for example.
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Old Sep 25th 2014, 6:14 pm
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Default re: Non Resident Alien and the FATCA rulings

Originally Posted by sherbert View Post
Hi,

I have been following this with interest:
'I was terrified we'd lose all our money': banks tell US customers they won't work with Americans | Money | theguardian.com

Posting for the information of others as well as for information on the following:

Does anyone know whether this affects non-resident aliens or is it only those with greencards/passports?
If you are a non resident alien for tax purposes (generally your first year in the US if less than 6 months), it shouldn't affect you. However anyone that is a resident for tax purposes (just about any visa where you meet the "substantial presence test", it does affect them since they are taxed on worldwide income.
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Old Sep 25th 2014, 6:23 pm
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Default re: Non Resident Alien and the FATCA rulings

I do wonder sometimes just how Boris "GBP250K is chickenfeed" Johnson deals with his US tax and reporting obligations.
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Old Sep 25th 2014, 6:26 pm
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Default re: Non Resident Alien and the FATCA rulings

Yes, we are not tax payers for first 2 years due to my OH's nationality and agreement between his country and USA.

My bank has sent out forms asking customers to declare any ties with the US (even if you have a financial advisor with ties to the US - how would you even know?!).

Naturally there has been a huge outcry because it's violation of the privacy of data act. They did state however, if you did not return the form they will freeze/close your accounts. Apparently my bank had 30 billion $ withheld by the US for doing business with Americans.

This is mindblowing. How can the US dictate how banks in other countries do their business.
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Old Sep 25th 2014, 6:40 pm
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Default re: Non Resident Alien and the FATCA rulings

Originally Posted by hungryhorace View Post
It affects anyone with a link to the United States I believe. For example, if me and my USC wife live in the UK, how does the bank know my wife is American? I certainly haven't declared my citizenship to the non-US bank accounts I hold, for example.
How would your wife answer the following questions when opening a new financial account in the UK?

What is your place of birth?
List all your nationalities.
List all jurisdictions where you are subject to tax reporting.

It would be unfair to say "all" financial institution in the UK are asking these questions today (no one knows for sure) but it seems most are. I have UK friends who have no ties in any way to the US who have been asked these questions.

This thread came up today on the UK Yankee site in relation to an application for a cashback credit card.

Denial of banking services, FATCA?

Last edited by theOAP; Sep 25th 2014 at 6:50 pm.
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Old Sep 25th 2014, 6:46 pm
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Default re: Non Resident Alien and the FATCA rulings

Originally Posted by sherbert View Post
Hi,

I have been following this with interest:
'I was terrified we'd lose all our money': banks tell US customers they won't work with Americans | Money | theguardian.com

Posting for the information of others as well as for information on the following:

Does anyone know whether this affects non-resident aliens or is it only those with greencards/passports?
It affects all US taxpayers. This includes anyone who the IRS considers to be a resident in the US for tax purposes. Other than a few rare exceptions, this means anyone who passes the IRS's substantial presence test, or their green card test. It also includes all green card holders and US citizens who the IRS consider to be non-resident for tax purposes.

Also, you need to be clear, "resident aliens" for the IRS are those who are resident for tax purposes. You can be a US tax resident without having a green card or citizenship, by passing the substantial presence test. I am currently on an L1-B visa, and I was a US tax resident for 2012 and 2013.
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Old Sep 25th 2014, 6:47 pm
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Default re: Non Resident Alien and the FATCA rulings

Oh, and can a mod rename the title so "FACTA" changes to "FATCA", please?
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Old Sep 25th 2014, 6:47 pm
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Default re: Non Resident Alien and the FATCA rulings

Originally Posted by sherbert View Post
Naturally there has been a huge outcry because it's violation of the privacy of data act.
It's not a violation of the privacy of data act. The UK Parliament passed legislation which over-rules the UK privacy act where 'US Persons' and FATCA are involved. See 2013 Finance Act, clause 222.
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Old Sep 25th 2014, 7:12 pm
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Default re: Non Resident Alien and the FATCA rulings

And the good news!

The IRS issued this warning yesterday:
"IRS Warns Financial Institutions of Scams Designed to Steal FATCA-Related Account Data"

"The IRS has reports of incidents from multiple countries and continents."

IRS Warns Financial Institutions of Scams Designed to Steal FATCA-Related Account Data

The IRS could compromised our data, we feel like real Americans now.
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Old Sep 25th 2014, 7:16 pm
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Default re: Non Resident Alien and the FATCA rulings

Originally Posted by sherbert View Post
Yes, we are not tax payers for first 2 years due to my OH's nationality and agreement between his country and USA.

My bank has sent out forms asking customers to declare any ties with the US (even if you have a financial advisor with ties to the US - how would you even know?!).

Naturally there has been a huge outcry because it's violation of the privacy of data act. They did state however, if you did not return the form they will freeze/close your accounts. Apparently my bank had 30 billion $ withheld by the US for doing business with Americans.

This is mindblowing. How can the US dictate how banks in other countries do their business.
The US doesn't dictate anything but if foreign banks want to do business in the US, then they either sign the FATCA agreement or close down their US businesses. Therefore even Switzerland signed the FATCA agreement otherwise nearly 1/2 of their businesses would have to be sold. The Cayman Islands also signed the agreement since otherwise they wouldn't be allowed to have branch offices in the US to solicit Americans to invest in hedge funds located in the Cayman Islands.

Banks such as Lloyds, Barclays, HSBC, Deutsche Bank, BNP Paribas, and ING all have a substantial presence in the US even though on the surface, their presence may not be noticed by the average consumer.
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Old Sep 25th 2014, 7:17 pm
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Default Re: Non Resident Alien and the FATCA rulings

Originally Posted by theOAP View Post
It's not a violation of the privacy of data act. The UK Parliament passed legislation which over-rules the UK privacy act where 'US Persons' and FATCA are involved. See 2013 Finance Act, clause 222.
My bank is not in the UK. Not sure about the country's legislation on FATCA rulings. Will investigate.
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Old Sep 25th 2014, 7:33 pm
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Default Re: Non Resident Alien and the FATCA rulings

Originally Posted by sherbert View Post
My bank is not in the UK. Not sure about the country's legislation on FATCA rulings. Will investigate.
Even if the country has not signed a FATCA agreement and you are liable for taxes on worldwide income and don't file a FATCA form, penalties can be severe if the IRS finds out that you have assets in another country. Prior to FATCA, there was only FBAR (self reporting of assets abroad) and many paid severe penalties and/or went to jail when it was discovered that many American taxpayers were hiding funds in Swiss bank accounts and not reporting them.
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Old Sep 25th 2014, 10:41 pm
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Default Re: Non Resident Alien and the FATCA rulings

But the assets relate to a mortgage so this is slightly different than having wads of cash stashed away in an offshore, which unfortunately I don't have, right?

What if you are already paying tax on those assets in another country, which I am? Surely I am not going to be taxed by the US government as well on a relatively small mortgage.

I know I have to declare income from the property rent (which is basically zero) which I will do when the time comes to file but I am confused about whether I have to pay tax on it here or not.
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Old Sep 25th 2014, 11:33 pm
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Default Re: Non Resident Alien and the FACTA rulings

Originally Posted by rpjs View Post
I do wonder sometimes just how Boris "GBP250K is chickenfeed" Johnson deals with his US tax and reporting obligations.
Iirc he renounced his US citizenship after he discovered he was a US citizen. Whether he paid any tax at the time of renouncement I have no idea.
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