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US Treasury threatens UK expat bank account closures for non FATCA compliance
| Published: | 15 Jul at 6 PM |
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It’s not just USA citizens who’re living a nightmare due to FATCA, as British expats living in the USA are now being threatened with closure of their UK bank accounts if they don’t comply.
As FATCA continues to tighten its claws on American expats living across the world, UK expats working in the USA are facing the closure of their British bank accounts as a result of the recently introduced, draconian law. Brits living in the USA are forced to submit a folder-full of forms in order to convince the IRS that they’re paying the right amount of tax.
Brit expats are claiming they have already sent the required paperwork, but the tax authority is demanding the forms be filled ihn again and resent within 90 days. Expats also have to send proof of their identity to their British bank. Popular British bank HSABC has stated that, should the forms not be received by the end of the 90 day period, it will proceed with the shutting down of expat bank accounts.
Other British banks are following the same procedure, as they have no option but to comply with FATCA after the UK signed on to its rules. UK law now compels banks to meet FATCA’s due diligence requirements under the US/UK Intergovernmental Agreement implementing FATCA and aimed at improving cross-border tax compliance.
A number of UK banks have rejected FATCA’s bureaucratic nightmare by refusing to offer accounts to US citizens or expats living in the USA. Long-standing British accounts owned by UK citizens working in America have been closed as a result, some with very little notice.
Fines for banks not complying with FATCA requirement are huge, and have discouraged stockbrokers as well as bankers from dealing with expats living and working in the USA. Failure to report even one customer with savings of over £32,000 would incur some 30 per cent of the bank’s US income being withheld by the US Treasury. Industry sources state the Treasury is using banks as its personal tax collectors worldwide.
As FATCA continues to tighten its claws on American expats living across the world, UK expats working in the USA are facing the closure of their British bank accounts as a result of the recently introduced, draconian law. Brits living in the USA are forced to submit a folder-full of forms in order to convince the IRS that they’re paying the right amount of tax.
Brit expats are claiming they have already sent the required paperwork, but the tax authority is demanding the forms be filled ihn again and resent within 90 days. Expats also have to send proof of their identity to their British bank. Popular British bank HSABC has stated that, should the forms not be received by the end of the 90 day period, it will proceed with the shutting down of expat bank accounts.
Other British banks are following the same procedure, as they have no option but to comply with FATCA after the UK signed on to its rules. UK law now compels banks to meet FATCA’s due diligence requirements under the US/UK Intergovernmental Agreement implementing FATCA and aimed at improving cross-border tax compliance.
A number of UK banks have rejected FATCA’s bureaucratic nightmare by refusing to offer accounts to US citizens or expats living in the USA. Long-standing British accounts owned by UK citizens working in America have been closed as a result, some with very little notice.
Fines for banks not complying with FATCA requirement are huge, and have discouraged stockbrokers as well as bankers from dealing with expats living and working in the USA. Failure to report even one customer with savings of over £32,000 would incur some 30 per cent of the bank’s US income being withheld by the US Treasury. Industry sources state the Treasury is using banks as its personal tax collectors worldwide.
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