Jellyfish

Hello all. I've been lurking for awhile and have learned a lot, but am driven to my first post by a situation I have not seen addressed . . . although I suspect there is nothing new under the BE sun.

I am an American citizen, relatively recently returned after living in the UK for many years. I have been using the same US bank account I had since before I went to the UK, but have recently tried to open an account at a different bank - Capital One - only to be told I can't because I am subject to FATCA reporting. This is due to having a personal pension invested in the UK. I can hardly believe it. Certainly Brits move to the US all the time and open bank accounts and while not all of them will be subject to FATCA reporting, some will. Has anyone else been prevented from opening a bank account in the US due to FATCA?

mrken30

Are you trying to open a UK Capital One account or a US Capital One account?

Jellyfish

US Capital One account.

mrken30

I didn't realize US banks have to report accounts to the UK. Maybe this is the reason. Maybe is they don't accept FATCA customers, they are exempt from reporting to the UK.

The UK-US IGA was originally implemented into UK law via the International Tax Compliance (United States of America) Regulations 2013 (SI 2013/1962) which came into effect on 1 September 2013. These regulations have since been revoked and replaced by the International Tax Compliance Regulations 2015, which came into force on 15 April 2015. HMRC has also produced detailed Guidance on the Regulations which is updated from time to time (the latest version being published on 14 September 2015).

https://www.out-law.com/sectors/fina...nce-act-fatca/

mrken30

This article may give some insight. It seems HMRC as much of a problem to expats as the IRS.

Information on expats opening offshore accounts to be shared with HMRC - Telegraph

It used to be only the poor that had problems opening an account.

The pensions thing is a minefield, I report mine, but it appears that UK pension companies are exempt from FATCA reporting, so the question is how do the correlate the numbers?

mrken30

You could just call Capital One. This sounds like it may be difficult to open accounts in the future.

Jellyfish

I did speak to a manager there who said it is a corporate decision to not open bank accounts for citizens of any country who are subject to FATCA reporting as they don't want to have to deal with the paperwork. I don't know enough about FATCA to know exactly what paperwork they would have to deal with, as my UK pension in a UK institution is nothing to do with them.

Jellyfish

Just to be clear, I'm not a British expat, I'm an American citizen. However, I lived in the UK for over 25 years, hence the personal pension in the UK. But I'm guessing a British expat might have the same problem as me with this.

mrken30

I wonder if they are concerned if you are required to report FATCA/FBAR or if you are a person for which they would have to report FATCA, eg a UK resident for tax purposes. As a US resident/citizen they are not reuired to file FATCA for you I believe.

Orangepants

I suspect the manager you spoke to has little to no knowledge of what he is talking about. As a US Citizen resident in the US, your accounts in the US are not reportable for FATCA. Accounts you hold outside the US are, if they are over $50k.
FATCA requires the rest of the world's FIs to look through accounts and report US persons. Whilst some of the agreements (IGA) were reciprocal, little effort has been made by the US to accomplish this and share information. The US has not signed up to CRS.

Why was your pension account even mentioned? If you are reportable to the IRS by HMRC for any financial accounts in the UK, this has nothing to do with Capital One.

Jellyfish

They are aware that I am a US citizen and live in the US. I have to submit FATCA/FBAR and will probably have to do so for the rest of my life (barring economic meltdown, lol). I don't know if this is a new development among banks, or Capital One is an anomaly, but I find this very disturbing which is why I'm asking the question. It's bad enough that I can't have any financial mobility with UK accounts now that I'm no longer resident there. But to be faced with this in the US too?

Jellyfish

In the form to open the account, I was asked to tick a box saying I am not subject to FATCA reporting (it's part of their standard form). I couldn't do that, and it ballooned from there.

theOAP

Most curious.

What is FATCA reporting? - Capital One 360 Help Center

"What is FATCA reporting?

FATCA (Foreign Account Tax Compliance Act) reporting applies to accounts held with foreign financial institutions. Since Capital One 360 is a U.S. institution, our US Customers are not subject to FATCA reporting. However, the IRS still requires you to certify that you are not subject to this reporting." [Bold mine]

Jellyfish

Fascinating, theOAP. Why would the IRS require a potential bank customer to certify they are not subject to FATCA reporting? If that was the case, no one subject to FATCA reporting could open a bank account! I think what I was told is probably more accurate - this is the bank's decision, not the IRS', to avoid 'paperwork', real or imagined.

And no one else has run into this IRS "requirement" elsewhere?

Orangepants

OMG - that is so ridiculous. What is the point in certifying that you are not subject to reporting when they don't do any reporting anyway for US customers.

What the IRS does require one to certify on a W-9 is the following: 4. The FATCA code entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. As there are no codes for individuals, no 4 is immaterial.

I would ask the bank to show you this IRS requirement in the Regs. Tell them you'll sign a W-9.