USA bank, for a UK resident?

anon_ymous

Hi,

I'm looking in to buying property in the USA, and therefore receiving rent from there. I think it's best if it goes in to a US bank.

Does any one know if this is possible? Reading on MSE, it appears you can open a Bank of America account, in their branches in the UK? (London?) That's a bit of an issue for me, as I'm about 200 miles north of their branch, which I believe is in London?

Thanks

MK62

I'm not sure about the tax position, but you can have a foreign currency account with a UK bank - I had a US dollar one in Barclays a few years ago.

John_Jones

I had a HSBC USD account, opened from the U.K., and when I was in the auS I was able to open a local account with Citi.

anon_ymous

John_Jones wrote: »

I had a HSBC USD account, opened from the U.K., and when I was in the auS I was able to open a local account with Citi.

Hmm thanks for that. I guess I need to open one of those accounts then, in order to get a USD account. Though if I'm being paid in USD, they'd surely need a US sort code/"routing" number too?

John_Jones

waqasahmed wrote: »

Hmm thanks for that. I guess I need to open one of those accounts then, in order to get a USD account. Though if I'm being paid in USD, they'd surely need a US sort code/"routing" number too?

Yes, these were both accounts in the US, the HSBC one in New York and the Citi one in LA, so came with all the US codes.

anon_ymous

Thanks. RE: The above, I'm guessing I shouldn't use HSBC as I don't have a US sort code /account number?

The property will be managed by a property management company so no idea how that will be paid

bostonerimus

Why do you want to become a cross border landlord? Have you investigated the US Federal, State and UK tax consequences of deriving income from a real property in the US while a UK resident? You should read Article 6 of the US/UK tax treaty.

How did you hear about this US property management company?

Cactus_Jack

I believe Revolut are working on offering this and if it's anything like their other stuff it'll be simpler and cheaper than elsewhere. I found it mentioned https://community.revolut.com/t/us-bank-account-numbers-for-non-us-residents/20780/4 but may be worth messaging them for an update and to see if it'll cover what you need it for.

FB13

bostonerimus wrote: »

Why do you want to become a cross border landlord? Have you investigated the US Federal, State and UK tax consequences of deriving income from a real property in the US while a UK resident? You should read Article 6 of the US/UK tax treaty.

How did you hear about this US property management company?

Second this. Don’t forget local taxes potentially as well. I’d also be cautious that this is a scam.

If you really want to invest in US housing, you are better off doing it via a REIT. It will simplify things for you and be much more liquid. You can find REITs that focus on apartment buildings. Here is a list of potential options https://www.kiplinger.com/slideshow/investing/T044-S001-10-housing-reits-to-buy-for-the-rise-of-renters/index.html

EdSwippet

bostonerimus wrote: »

Why do you want to become a cross border landlord? Have you investigated the US Federal, State and UK tax consequences of deriving income from a real property in the US while a UK resident? You should read Article 6 of the US/UK tax treaty.

Yep. Also FIRPTA. No relief from this in the US/UK tax treaty.

Foreign persons are taxed only on certain items of income, including effectively connected income and certain U.S. source income. Foreign persons, however, are not taxed on most capital gains. Internal Revenue Code section 897, as enacted by FIRPTA, treats the gain on a disposition of an interest in United States real property as effectively connected income subject to regular federal income tax.

In other words, you will pay tax on any capital gain in this US property as if this gain were normal income, leading to a (likely much) higher tax bill than expected when you sell.

If you are determined to own a US investment property anway, you will probably want to structure your holding through one or more 'blocker' corporations to avoid the worst excesses of US tax for non-residents. More on the pitfalls and options in this paper.

anon_ymous

Cactus_Jack wrote: »

I believe Revolut are working on offering this and if it's anything like their other stuff it'll be simpler and cheaper than elsewhere. I found it mentioned https://community.revolut.com/t/us-bank-account-numbers-for-non-us-residents/20780/4 but may be worth messaging them for an update and to see if it'll cover what you need it for.

Thanks for that. I've also been told that you can have another bank account there however you'd have to register as an LLC first?