opening a UK savings account from the US

weezypops

My husband and I are UK citizens but live in the US. We will be moving back to the UK in October, and will be looking to buy a house. His parents are giving us some money towards it and will be transferrring it to his Natwest bank account in June. We'd like to put it into a savings account until we get back to get a bit of interest, but it seems you need to be a UK resident to open most accounts.

Does anyone know of any we could open from here, and use once we're back?


Thanks

Louise

inmypocketnottheirs

I have a similar requirement but in reverse. In as much (at the moment) I am UK resident, but I have business interests in the US. The best solution for me is a citibank account (https://www.citibank.co.uk) where I can have a current UK and US$ account, and deposit accounts in both currencies.

Most (if not all) UK banks are now so difficult to open an account with - it is almost that they do not want your business - mostly due to the fact there is no method to speak to anyone in any authority. It appears that all banking is now operated by 'remote control', there seems to be no ability to serve anyone who does not meet the standard criteria.

You may be able to have multi-currency accounts with Citibank in the US. If not I would consider somewhere like the Isle of Man, Jersey or Guernsey, where there is a little more disposition towards 'non standard' customers.

I do not know how long you have been away from the UK, but I think you will find it a very frustrating country to return to.

Good luck!

weezypops

Thanks. I'll look into the Citibank account. It seems odd to me that it's so hard, as we're not trying to borrow money. My husband has been a Natwest customer for about 15 years, and you'd think they'd welcome someone putting nearly a hundred thousand pounds into one of their accounts, but apparently not!

Cook_County

Now don't forget tax will you?

1. Because the gifts will be given to you when US resident you'll need to file a form 3520 reporting the receipt of the gift.
2. You'll also have to mention the new foreign bank account on the TF F 90-22.1, but you probably file this already,,,
3. If the interest is credited onshore in the UK you'll owe UK tax on the interest at a rate of up to 40%.
4. If the interest is credited offshore and the account closed at least a day before you become UK resident you'll owe no UK tax on the interest.
5. But if the interest is credited when US resident you'll owe US Federal and maybe State tax on the interest (of course you may have excess foreign tax credits or lots of deductions so I can't say for certain what rate of tax you'd end up paying in the US).
So on balance for many people who are not UK resident it pays to bank offshore to avoid all UK tax but you'd need to weigh this against the US tax liability (don't forget you can't file jointly in the year you leave the US so your US tax rate might be higher this year than last).

digerati

weezypops wrote: »

My husband has been a Natwest customer for about 15 years, and you'd think they'd welcome someone putting nearly a hundred thousand pounds into one of their accounts, but apparently not!

Ah! Your husband shouldn't have closed the account. One of the cardinal rules is to never, ever close bank accounts when leaving a country as they can be very difficult to open again - particularly from abroad. Your husband might try reopening the same account as they should still have his details on record. Possibly his parents can act as a reference (this was how I opened a NatWest account from abroad).

By the way don't close all your US bank accounts when you leave - otherwise you will not be able to stash cash for future US holidays or investments. You can access your US bank accounts abroad via a debit card.

Hope this helps!

barak

weezypops wrote: »

My husband and I are UK citizens but live in the US. We will be moving back to the UK in October ............ but it seems you need to be a UK resident to open most accounts.
Does anyone know of any we could open from here, and use once we're back?

Many of the Offshore accounts in the Channel Islands and the Isle of Man run by banks like Alliance & Leicester, Bradford & Bingley, Northern Rock etc. are designed for expatriates as well as UK residents, so you shouldn't have any problem opening one.

Have a look at http://www.moneyfacts.co.uk/searches/offshore.aspx

I don't understand the posting about UK tax liability, as both onshore and offshore accounts will, on request, pay interest gross while you are abroad. Anyway, in your case, if you opt for annual interest, you may not even receive any before you return to the UK.

Cook_County

Barak - all offshore accounts pay interest gross. Whether the interest is paid gross or net is irrelevant.

All I was saying ewas that 100% of the UK tax liability can be avoided - 100% legally - by investing the money offshore and having the account closed before coming back to the UK. This would not work if the account was onshore.

However the OP needs to weigh the UK tax saving against the US tax cost of US tax payable.

weezypops

digerati wrote: »

Ah! Your husband shouldn't have closed the account. One of the cardinal rules is to never, ever close bank accounts when leaving a country as they can be very difficult to open again - particularly from abroad. Your husband might try reopening the same account as they should still have his details on record. Possibly his parents can act as a reference (this was how I opened a NatWest account from abroad).

By the way don't close all your US bank accounts when you leave - otherwise you will not be able to stash cash for future US holidays or investments. You can access your US bank accounts abroad via a debit card.

Hope this helps!

Actually he hasn't closed the account - he still has a Natwest bank account which we use when sending money back to pay our various UK bills - they just wouldn't let him open a savings account.

Thanks for the US bank account tip though - that's a good idea!

weezypops

Cook_County wrote: »

Now don't forget tax will you?

1. Because the gifts will be given to you when US resident you'll need to file a form 3520 reporting the receipt of the gift.
2. You'll also have to mention the new foreign bank account on the TF F 90-22.1, but you probably file this already,,,
3. If the interest is credited onshore in the UK you'll owe UK tax on the interest at a rate of up to 40%.
4. If the interest is credited offshore and the account closed at least a day before you become UK resident you'll owe no UK tax on the interest.
5. But if the interest is credited when US resident you'll owe US Federal and maybe State tax on the interest (of course you may have excess foreign tax credits or lots of deductions so I can't say for certain what rate of tax you'd end up paying in the US).
So on balance for many people who are not UK resident it pays to bank offshore to avoid all UK tax but you'd need to weigh this against the US tax liability (don't forget you can't file jointly in the year you leave the US so your US tax rate might be higher this year than last).

Now, I'm not 100% sure about all this, but I believe that his dad set up something to avoid this. The money's not strictly a gift - my father in law set up a trust fund with money left by his mother when she died, and my husband is a trustee. I think he did this to avoid paying whopping tax in it.. but I'll look into it. Thanks.

Cook_County

It sounds as if you may have significant US tax problems.

As beneficiaries of a foreign trust you must also file Forms 3520 and 3520-A along with your US tax return each year. Your husband should also have disclosed signature authority on your annual foreign bank reporting forms.

Penalties for failure to file Forms 3520 and 3520-A are a whopping 35% of the value of the trust. Penalties for failure to file the foreign bank forms are even more horrid than that.

You may even find that the trust may be US resident because it has a US resident trustee so could be subject to US courts - but you'd need a US lawyers opinion on this.

This is not a DIY type of issue and you should urgently take legal advice before leaving the United States.

digerati

weezypops wrote: »

Actually he hasn't closed the account - he still has a Natwest bank account which we use when sending money back to pay our various UK bills - they just wouldn't let him open a savings account.

Thanks for the US bank account tip though - that's a good idea!

From experience - after you deposit a sizeable sum into a NatWest current account they will invite you to open a term-deposit or other saving product, so I wouldn't worry. Also you should ask your parents-in-law to get UK tax advice on whether they should gift you before you return to the UK or after as it might be more beneficial one way compared to the other.

Finally I wouldn't worry about any US tax reporting requirements as once you are non-resident you won't have to worry about the IRS. Remember to apply for a US tax refund before leaving the USA since you weren't there a full tax year.