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-   -   UK bank account for UK Citizen / non-resident (https://britishexpats.com/forum/usa-57/uk-bank-account-uk-citizen-non-resident-929050/)

Steerpike Nov 4th 2019 7:54 am

UK bank account for UK Citizen / non-resident
 
My mum recently passed away in UK and I have a small amount of money coming to me - probably less than 6k GBP (~$7.7k) But there's another amount of money that my brother is planning to give me, closer to 30k GBP (~$38k) (this money is indirectly related to my mum but not technically 'inheritance', so will be a 'gift' from my brother I believe). So all in all, I will have about 36k GBP (~$46k) being given to me in GBP.

I have no great need or desire to transfer this to the US right now, especially given the poor exchange rate. But I don't have a UK bank account any longer and - while I'm still a UK Citizen - I'm not a UK resident - no address in UK.

So - can I open a UK bank account as a non-resident citizen and put this money there? I'm aware of the 'reporting' requirements for 'foreign bank accounts' in the US (FBAR) - I don't mind dealing with those, and I'll also deal with the tax implications of this inheritance / gift separately. For now, the question is ... can I open a bank account in the UK, so that I can deposit a check (cheque :) ) and later withdraw or transfer the money as needs arise?


morpeth Nov 4th 2019 8:20 am

Re: UK bank account for UK Citizen / non-resident
 

Originally Posted by Steerpike (Post 12758639)
My mum recently passed away in UK and I have a small amount of money coming to me - probably less than 6k GBP (~$7.7k) But there's another amount of money that my brother is planning to give me, closer to 30k GBP (~$38k) (this money is indirectly related to my mum but not technically 'inheritance', so will be a 'gift' from my brother I believe). So all in all, I will have about 36k GBP (~$46k) being given to me in GBP.

I have no great need or desire to transfer this to the US right now, especially given the poor exchange rate. But I don't have a UK bank account any longer and - while I'm still a UK Citizen - I'm not a UK resident - no address in UK.

So - can I open a UK bank account as a non-resident citizen and put this money there? I'm aware of the 'reporting' requirements for 'foreign bank accounts' in the US (FBAR) - I don't mind dealing with those, and I'll also deal with the tax implications of this inheritance / gift separately. For now, the question is ... can I open a bank account in the UK, so that I can deposit a check (cheque :) ) and later withdraw or transfer the money as needs arise?

Doubt there is any tax liability on either side of Atlantic for those sums.

Some banks (HSBC or Barclays)have faciliteis for non residents, and especially those in Jersey will open non resident accounts. Or you can use services like Transferwise which will give you as UK account number and sort code. .

durham_lad Nov 4th 2019 9:21 am

Re: UK bank account for UK Citizen / non-resident
 
Condolences on the loss of your mum.

I agree with Morpeth's advice above.

As for tax implications then you as the receiver of the inheritance and the gift have nothing to do. Estate taxes will have been assessed and paid on your mum's estate, probably zero. The gift from your brother will not be subject to estate taxes at all if he lives another 7 years, and even then his estate will have to be high enough to be subject to estate taxes.

Below is a link explaining the UK inheritance gift taxes

https://www.gov.uk/inheritance-tax/gifts

The 7 year rule

If there’s Inheritance Tax to pay, it’s charged at 40% on gifts given in the 3 years before you die.

Gifts made 3 to 7 years before your death are taxed on a sliding scale known as ‘taper relief’.Years between gift and deathTax paidless than 340%3 to 432%4 to 524%5 to 616%6 to 78%7 or more0%

lansbury Nov 4th 2019 9:30 pm

Re: UK bank account for UK Citizen / non-resident
 
If you find you can't open an account at a High St. bank, you could consider a sterling borderless account at transferwise.com

https://transferwise.com/us/borderless/

petitefrancaise Nov 4th 2019 11:02 pm

Re: UK bank account for UK Citizen / non-resident
 
have a look at Revolut. They are shortly opening in the USA as well.
Sorry to hear about your mum Steerpike.

Steerpike Nov 4th 2019 11:28 pm

Re: UK bank account for UK Citizen / non-resident
 

Originally Posted by durham_lad (Post 12758664)

... As for tax implications then you as the receiver of the inheritance and the gift have nothing to do. Estate taxes will have been assessed and paid on your mum's estate, probably zero. The gift from your brother will not be subject to estate taxes at all if he lives another 7 years, and even then his estate will have to be high enough to be subject to estate taxes.

Below is a link explaining the UK inheritance gift taxes

https://www.gov.uk/inheritance-tax/gifts[h2]

My research on the UK tax implications of the gift were the same as above - basically, as long as he lives another 7 years there's no issue in the UK, and even then he'd have to have given me something like a total of 325,000 GBP which isn't in the realm of possibilities. So I'm good on UK taxes.

For the US, I read this: https://smartasset.com/retirement/gift-tax-limits

... The annual gift tax exclusion is $15,000 for the 2019 tax year. ...
If you gift more than the exclusion to a recipient, you will need to file tax forms to disclose those gifts to the IRS. You may also have to pay taxes on it. ... However, you won’t have to pay any taxes as long as you haven’t hit the lifetime gift tax exemption.
...
Most taxpayers won’t ever pay gift tax because the IRS allows you to gift up to $11.4 million over your lifetime without having to pay gift tax. ...

So let’s say that in 2019 you gift $215,000 to your friend. This gift is $200,000 over the annual gift exclusion. That means you will need to report it to the IRS. However, you won’t immediately have to pay tax on that gift. Instead, the IRS deducts that $200,000 from your lifetime gift tax exemption. Assuming you have never made any other gifts over the annual exemption, your remaining lifetime exemption is now $11.2 million ($11.4 million minus $200,000).
.
So ... looks like I'm in the clear there too. The only complication I can see is - the onus in the above discussion is on the GIFT GIVER to file the forms to the IRS, but in my case the 'giver' is not a US citizen, so I'm not clear it a non-resident non-citizen has any 'standing' to submit a tax document to the US.

Regarding the UK bank account - this thread seems appropriate:
https://money.stackexchange.com/ques...-residents-tou

First of all, it says it's legal for a non-resident to open a UK bank account, and that at least four major banks will do it (Barclays / Lloyds / HSBC / NatWest). But then it says practically, if you don't have at least 50k GBP, you don't have a chance. Does anyone have any experience of opening an account as a non-resident with 'only' 36k GBP?

Thanks for info!

durham_lad Nov 5th 2019 8:06 am

Re: UK bank account for UK Citizen / non-resident
 
Definitely no IRS forms need to be filed by either party in this case.

I know someone who opened a UK account with HSBC after first opening a USA account with them. It does require a visit to a branch at one point to sign documents and be id’ed in person but they do have branches in LA which I believe is close to where the OP lives.

Steerpike Nov 6th 2019 11:39 pm

Re: UK bank account for UK Citizen / non-resident
 

Originally Posted by durham_lad (Post 12759089)
Definitely no IRS forms need to be filed by either party in this case.

I know someone who opened a UK account with HSBC after first opening a USA account with them. It does require a visit to a branch at one point to sign documents and be id’ed in person but they do have branches in LA which I believe is close to where the OP lives.

Yesterday I visited branches of Lloyds, HSBC, Barclays, Nat West. Basically, NatWest were clueless; Barclays referred me to their website; HSBC said they could not help me since I was not a UK resident; after I pressed the issue, they discovered that yes, I might be able to do something after opening a US account first and referred me to their website. Lloyds actually sat me down with a fairly senior guy who called their international folks, and that approach died when I said I was a US resident; apparently Lloyds can open international accounts but they don't have a license with the US so that was a dead end.

Last night I spent over an hour chatting with HSBC people online. Seems like I can create a US account very easily, and online - so I could do that 'now' (while in the UK). But their international folks were less helpful. Finally, after about 45 minutes of going round and round, they insisted they could not help me while I was in the UK - I would have to first return to the US before they could help me setup a UK account. I see that they have a branch in Fremont and in San Francisco, which is close to where I live. So it's looking like I can't do much till I get back to US, which sucks. I guess I can create the HSBC US account online and get that started so that when I walk into a branch there they'll have something to start from.

UPDATE - today I spoke to a very helpful person at Barclays International - he was based in Isle of Man. He said as long as I have at least 25,000 GBP I can set up an account, with no need for a corresponding account in US. Everything he said sounded reasonable and they do the application by video, including verification of docs! So it's looking like I'll go the Barclays route. I did get a call back from someone at HSBC and he is convinced I can just open a UK account without a US account, but I'm very doubtful. I'll pursue that angle also, though, to keep options open.

Steerpike Nov 6th 2019 11:42 pm

Re: UK bank account for UK Citizen / non-resident
 

Originally Posted by durham_lad (Post 12759089)
Definitely no IRS forms need to be filed by either party in this case.
...

Hey, Durham - the quote I posted above specifically said, in part, "... The annual gift tax exclusion is $15,000 for the 2019 tax year. ...
If you gift more than the exclusion to a recipient, you will need to file tax forms to disclose those gifts to the IRS."

So how come you are so sure that no IRS forms have to be filed?

Thanks!

petitefrancaise Nov 7th 2019 12:06 am

Re: UK bank account for UK Citizen / non-resident
 
re: HSBC
They send me information about opening an account for new USA arrivals. No UK account is needed if it is handled by the international team. So, I'm guessing it works the other way too? Anyway, sounds like Barclays is doing the job for you. Hope it goes well.

durham_lad Nov 7th 2019 4:27 pm

Re: UK bank account for UK Citizen / non-resident
 

Originally Posted by Steerpike (Post 12759981)
Hey, Durham - the quote I posted above specifically said, in part, "... The annual gift tax exclusion is $15,000 for the 2019 tax year. ...
If you gift more than the exclusion to a recipient, you will need to file tax forms to disclose those gifts to the IRS."

So how come you are so sure that no IRS forms have to be filed?

Thanks!

I thought you said the gifter was a UK citizen living in the UK so he has no need to file any forms with the IRS since he is not subject to US taxes or US inheritance tax. If I am wrong and he is a US tax payer then he will have to file a form, easy to do by mail and simply records he has reduced his lifetime allowance of $11m by the amount of the gift, or if he is married then he and his wife combined can gift $30k without filing the form.

I have filed the IRS gift gift tax once while living in the UK. The form is available on the IRS website, he would simply print it out, fill it in and mail it off. As usual the IRS won’t respond.

Olly_ Nov 7th 2019 6:50 pm

Re: UK bank account for UK Citizen / non-resident
 
HSBC are a nightmare. I opened a Premier checking account to get the $750 bonus they are currently offering and I'm not really too impressed so far. The online banking/phone app is so old fashioned compared to all the other big banks, the customer service isn't great (overseas call centers, long wait times) and they haven't even paid the bonus yet, I've had to spend an hour on the phone chasing it and yesterday they finally emailed to confirm I'd get it in the next 2-3 weeks.

If this is their "Premier" service god help anybody else.

I thought this would be a useful test run and if all had gone well I'd keep the account and even open a UK account but I'm out.

petitefrancaise Nov 7th 2019 6:54 pm

Re: UK bank account for UK Citizen / non-resident
 

Originally Posted by Olly_ (Post 12760452)
HSBC are a nightmare. I opened a Premier checking account to get the $750 bonus they are currently offering and I'm not really too impressed so far. The online banking/phone app is so old fashioned compared to all the other big banks, the customer service isn't great (overseas call centers, long wait times) and they haven't even paid the bonus yet, I've had to spend an hour on the phone chasing it and yesterday they finally emailed to confirm I'd get it in the next 2-3 weeks.

If this is their "Premier" service god help anybody else.

I thought this would be a useful test run and if all had gone well I'd keep the account and even open a UK account but I'm out.

I don't recommend them either - mostly because they don't have any branches within 180miles of Austin but also because I hear too many not great anecdotes from colleagues around the country.

Olly_ Nov 7th 2019 6:56 pm

Re: UK bank account for UK Citizen / non-resident
 
Yes, that's another negative, they have a branch about 10 miles away from me but all the other big banks have branches in my town or the next one over which is much more convenient.

Steerpike Nov 19th 2019 1:22 am

Re: UK bank account for UK Citizen / non-resident
 
Update - Barclays were super-efficient and got me all setup with one video call. This was Barclays international, based in Isle of Man. Minimum balance 25k GBP to avoid fees, so not 'basic' but suits my needs. They did a video call and had me hold up my passport and drivers license to the camera, and also a form they had me download and sign - no need to scan anything, or submit anything - definitely pretty cool!

In the meantime, a lady at the first HSBC branch I walked into in UK had emailed her 'regional colleague' asking for his input. He got back to me and was convinced I could open a regular UK account with HSBC UK without any need for US or international elements - totally contradicting everything else I heard / read. So I went along with him despite being very skeptical. He arranged for me to go into a branch, and after a 2 hour session, I was given a basic bank account! I'm still half-expecting someone to write / email and say, sorry we made a mistake, but so far it's still moving along. And even though HSBC is clearly not in the same caliber as Barclays International, I may end up ditching the Barclays account and using the HSBC one as there are virtually no minimums and the fees for transferring to US are quite low in comparison.

I'll be getting the check / cheque pretty soon so I'll make a final decision then. Clearly there is a lot of confusion and inconsistency in this area!

Meanwhile, no one seems to think that suddenly acquiring $40k will raise any eyebrows with the IRS; yet if you 'earn' that amount, you have to pay a ton of taxes! I would have thought 'gifts' would be treated less favorably than hard-earned income...



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