UK/US dual citizen fatca pension nightmare

EdSwippet

DairyQueen wrote: »

Bit harsh dunstan. It's hardly the OP's fault that the US legal and tax system has such a far reach.

Agreed. It is also not the OP's fault that the UK and other countries simply rolled over when the US demanded that their banks should participate in a witch-hunt for US persons living outside the US. And at those banks' own costs, too.

And while the OP could contact his US congresscritter to complain, and ultimately vote against them, they might as well save the time and effort for a more fruitful pursuit. Renouncing US citizenship as suggested, for example.

DairyQueen wrote: »

It wouldn't have occurred to me to forego US citizenship for this (or any other) financial reason.

It did me. This whole taxation-by-citizenship thing is pretty much the entire reason why I did not take out US citizenship when eligible. And with each day that passes I am more grateful than the day before that I did not.

DairyQueen wrote: »

Looks like you (a private UK resident) don't fit their definition of 'US Person'. Suggest you call them.

The US person definition you quote is the one that prevents sale of non-US mutual funds to US [STRIKE]citizens[/STRIKE] residents. Unfortunately it is subtly different to the definition of a US person for US tax purposes. It's a needlessly technical distinction, but in this case very much on point, unfortunately.

To the OP:

I understand your anger and frustration, and I agree with you entirely. As well as your congressperson you might also try complaining to your UK MP over this. In my experience neither of these will garner anything more than a canned response that boils down to "drop dead", but no reason not to try anyway. You have my sympathy. At least I had a choice about whether or not to become a US citizen -- after careful consideration, I chose not to. You really didn't have that same option.

atush

I am a US person, and cant give it up. Because I dont have another flag to fly under.

TrickyDicky101

DairyQueen wrote: »

Bit harsh dunstan. It's hardly the OP's fault that the US legal and tax system has such a far reach. It wouldn't have occurred to me to forego US citizenship for this (or any other) financial reason.

What's harsh about stating facts?

EdSwippet

atush wrote: »

I am a US person, and cant give it up. Because I dont have another flag to fly under.

Actually you can give it up. The US may not exactly like it, but in practice it cannot prevent you from becoming stateless if you wish. That's probably a pretty tiresome position to be in, though. Maybe Dominican citizenship first, purchasable for around $100k?

bostonerimus

FATCA doesn't (or shouldn't according to an agreement between the US and the UK) apply to UK base pensions......

EdSwippet

bostonerimus wrote: »

FATCA doesn't (or shouldn't according to an agreement between the US and the UK) apply to UK base pensions......

Indeed, but that does not prevent UK pension providers and other platforms from making a commercial risk-based decision to refuse service to US citizens purely on the grounds that it will make complying with the UK FATCA IGA vastly easier and cheaper for them. And unfortunately, it appears that many are now doing just that.

atush

EdSwippet wrote: »

Actually you can give it up. The US may not exactly like it, but in practice it cannot prevent you from becoming stateless if you wish. That's probably a pretty tiresome position to be in, though. Maybe Dominican citizenship first, purchasable for around $100k?

I am not going to become stateless due to a tantrum, thanks. I am not a toddler.

kidmugsy

EdSwippet wrote: »

Indeed, but that does not prevent UK pension providers and other platforms from making a commercial risk-based decision to refuse service to US citizens purely on the grounds that it will make complying with the UK FATCA IGA vastly easier and cheaper for them. And unfortunately, it appears that many are now doing just that.

I have every sympathy for them. Any non-US firm that left its future in the hands of the US courts would be, in my estimation, bonkers.

I also have every sympathy for the OP: what a hellish problem to face.

DairyQueen

EdSwippet wrote: »

Indeed, but that does not prevent UK pension providers and other platforms from making a commercial risk-based decision to refuse service to US citizens purely on the grounds that it will make complying with the UK FATCA IGA vastly easier and cheaper for them. And unfortunately, it appears that many are now doing just that.

Have I understood this correctly?
Platforms are refusing to do business with (i.e. discriminating against) a specific group of UK residents/citizens in order to circumvent legislation imposed by a foreign government?

I note that FATCA was enacted in 2010. Which of our wonderful UK governments agreed to force UK organisations to act as Uncle Sam's unpaid snoops? Brown or Cameron?

Anyone know if this is an industry-wide practice? If so, it would seem that the law of unintended consequences applies and the OP may indeed have to renounce US citizenship in return for equal treatment. The irony of this hasn't escaped me.

OP has my sympathy.

zagubov

This is a well-known problem and you might find most of Europe is reluctant to offer financial products to US citizens.

Other websites discuss the problems with renouncing US citizenship which mainly involves the sheer bureaucracy of it. It's well worth it.

That said, not sure being stateless is a great alternative. If you have the right to a UK or EU passport/citizenship that'll do nicely.