Unexpected request to confirm tax residency - Halifax

InA

I ignored the first letter with the accompanying form (actually I shredded / threw it away) as it looked suspicious, google searches didn't seem to suggest this was a legitimate organisation and I was not going to risk sending my details in the post to an unknown entity when my bank is already in possession of the details they were asking for.

I'm not a US citizen / tax resident in any other country, so this shouldn't apply to me. I had also opened another account with the same bank which involved signing a declaration on tax residency status (so they have the correct information on tax residency).

Here's is the relevant quote from the detailed guidance on FACTA (which was withdrawn on 02/06/2016):

Submit a FATCA Return

Reporting requirement

The deadline for submitting a return is 31 May following the end of the reporting year.
Please note – it is not necessary to make a ‘nil return’ if you have nothing to report.
However, you should check annually to ensure that there is nothing to report in that reporting year.
Late and inaccuracy penalties may apply where a valid return has not been submitted on time when there was an obligation to do so.

Now received another letter stating my details would passed on to HMRC. Does this mean I'm now going to be hassled by HMRC to prove my tax residency status? How do you provide evidence of something that doesn't exist? HMRC aren't exactly reknowned for common sense.

Bizarrely, the letter goes on to say that I should let the bank know if my tax residency circumstances change (they already have my info and should know it doesn't apply to me).

If this is genuine (which is dubious given the poor quality of communications so far) it seems a weird way to alienate your customers just to put on a show of doing everything possible to sniff out US citizens to avoid the possibility of a large fine.

Anyone had the same letter? What did you do about it?

badmemory

The Halifax paid me £50 for my list of comments/complaints about this letter. I suggested that whoever wrote the letter should be looking for another job. I have seen scam that looks less like scam than this letter did. It is however genuine. The bit that interested me especially was having to sign as "THE account holder" (not an account holder) when no account number was specified. So I could have been signing for any account that has nothing to do with me.

It would appear to be a box ticking exercise, with them not caring what the boxes were as long as they weren't going to get fined.

I have just today received their acknowledgement of the form. I'm just wondering if I am going to get similar letters re all my other accounts with them. It could turn into a nice little earner!

EdSwippet

InA wrote: »

I'm not a US citizen / tax resident in any other country, so this shouldn't apply to me.

It seems like either your bank thinks you are, or they are indulging in a large-scale CYA activity. It could be either. Is there anything at all in your past that suggests you might be? Otherwise, they might just be being super-careful to get definite confirmation to the contrary. Either way, it's more or less what the UK government agreed to with its "Intergovernmental Agreement" with the US on FATCA. Expect similar levels of nonsense to continue into the future, unfortunately.

InA wrote: »

Here's is the relevant quote from the detailed guidance on FACTA (which was withdrawn on 02/06/2016)...

What you quoted, though, was instructions for financial institutions reporting to HMRC. They don't have to report anything if they have no US-tainted customers. This 'nil return' business doesn't apply to you or any other individuals.

InA wrote: »

Now received another letter stating my details would passed on to HMRC. Does this mean I'm now going to be hassled by HMRC to prove my tax residency status?

Maybe. At this point, as far as I can tell, there isn't enough track record to know what will happen. Because your bank cannot obtain a 'self certification' from you to "prove" that you are not a US citizen, they have to report that fact to HMRC. What HMRC does with it seems unclear. They might clarify with you, or they might just pass on your account information to the IRS, since by default in FATCA such 'recalcitrant' accounts are reportable. Of course, the IRS is then powerless to do anything with this information if you're genuinely not a 'US taxable person', but... that's a large part of the nonsense of FATCA anyway.

InA wrote: »

How do you provide evidence of something that doesn't exist?

You can't, of course. The best you can do -- and in fact all that is required under the "Intergovernmental Agreement" that the UK signed up to (under duress) -- is to 'self certify' that you have no US taint. Which is, of course, precisely what any self-respecting and real tax evader would also do in the same circumstances.

InA

EdSwippet wrote: »

Is there anything at all in your past that suggests you might be?

Nothing. I have no connection to the USA at all.

I suspect you're right about the "CYA" activity.

EdSwippet wrote: »

You can't, of course. The best you can do -- and in fact all that is required under the "Intergovernmental Agreement" that the UK signed up to (under duress) -- is to 'self certify' that you have no US taint. Which is, of course, precisely what any self-respecting and real tax evader would also do in the same circumstances.

Precisely... I may be wrong but I believe accounts with less than $50000 are also exempt from being reported; which in itself would appear to be an obvious loophole for US citizens keen to dodge the IRS.

Thank you for your helpful response.

xylophone

They don't have to report anything if they have no US-tainted customers.

Crumbs! Going about ringing a bell shouting "Unclean, unclean"?:eek:

EdSwippet

xylophone wrote: »

Crumbs! Going about ringing a bell shouting "Unclean, unclean"?

Close enough. The official FATCA term for US taint is 'indicia', for example US place of birth, so the proper analogy is probably "Burn the witch".

System

Some while ago I got one of these letters from Lloyds. I have had no dealings with US, and Lloyds know perfectly well where my tax residence is.
The letter wanted me to sign on behalf of an unspecified account, and without any explanation send the form to some third party company who received no mention in the Lloyds letter.
The letter was badly worded, contained no explanation or information, and looked like a rather poor scam letter.

I ignored the third party address and wrote to the Lloyds head of savings whose name was on their letter, complaining about the letter, and refusing to sign the form.
I have just received another letter from Lloyds saying I do not need to complete the form and will not be referred to HMRC or US tax authorities.

badmemory

Clifford_Pope wrote: »

Some while ago I got one of these letters from Lloyds. I have had no dealings with US, and Lloyds know perfectly well where my tax residence is.
The letter wanted me to sign on behalf of an unspecified account, and without any explanation send the form to some third party company who received no mention in the Lloyds letter.
The letter was badly worded, contained no explanation or information, and looked like a rather poor scam letter.

This is my situation. The letter was so lazily written that it did not even mention that the reply was going to a third party who it turned out were Ernst & Young - even the return envelope made no mention of any business name. The savings director at Halifax & Lloyds (the same person) should be embarrassed at his shoddy execution of this matter.

ETA: It is no wonder that when logging into on-line banking the first page has a new bit about keeping your account secure. They must have realised that all those people who replied to their letter, without questioning it, are at risk of being scammed for real.

xylophone

Close enough. The official FATCA term for US taint is 'indicia', for example US place of birth, so the proper analogy is probably "Burn the witch".

Salem, perhaps?:)

smallfry27

I had < £5000 with Lloyds and NIL with Scottish Widows, so a previous post that it's only major account holders doesn't apply to me.