Documentation from UK savings accounts for non-resident alien US taxpayers

londoninvestor

Marcus UK won't open accounts for anyone who has to file a US tax return, because:

Marcus wrote:

For example, if you are currently required to file a US Tax Return or if you are a US Resident Alien, we will be unable to open an account for you. This is because at this time Marcus UK is unable to support customers subject to FATCA information reporting or to provide the required 1099 statement due to the additional infrastructure required to comply with these tax regulations.

Rules me out as I file a 1040NR as a non-resident alien. I'm a UK citizen, UK resident, UK domiciled, and have never been a US citizen, resident or any other form of US Person.

No big deal as I can use other savings providers with similar interest rates.

But out of interest, what FATCA or 1099 paperwork would Marcus actually need to file for me? Pretty much every other savings provider asks me about my tax residence, but doesn't ask me whether I file taxes in any other countries as a non-resident - implying they aren't providing any documentation to the US.

agrinnall

I don't know the answer, but one possibility is that as Goldman Sachs is a US company they may be required to comply with rules that non-US companies aren't.

EdSwippet

londoninvestor wrote: »

Rules me out as I file a 1040NR as a non-resident alien. I'm a UK citizen, UK resident, UK domiciled, and have never been a US citizen, resident or any other form of US Person.

Does it, though? On a strict reading of the Marcus conditions, I would say that you are not required to file a US tax return(*), but choose to file one, probably because it is more tax-efficient to do so.

What they are really after is US citizens, green card holders, and (although unlikely) US residents. And they are choosing to filter them out of holding any accounts because they do not want the paperwork or compliance hassle of handling all of the US's FATCA nonsense. It is they that have to do the FATCA filing, not you.

londoninvestor wrote: »

But out of interest, what FATCA or 1099 paperwork would Marcus actually need to file for me?

None, because you're not any type of 'US taxable person'. In essence, they expressed their restriction poorly. If you look at the FATCA 'indicia'(**) in the US/UK FATCA IGA(***) you will see that yours would not be a 'FATCA reportable account'.

I'd say just ignore this and open the account if you still want it. I have an account with Marcus, and can recommend it.


(*) Yeah, I know you could probably make this argument even for US citizens, since the US famously claims that its tax regime is 'voluntary'. Pure window dressing, of course.

(**) That's the language of a witch hunt, isn't it?

(***) The IGAs are the method by which the US forced its own extraterritorial tax law into the tax laws of other countries, using a form of gunboat diplomacy. The UK rolled over with indecent haste.

londoninvestor

EdSwippet wrote: »

Does it, though? On a strict reading of the Marcus conditions, I would say that you are not required to file a US tax return(*), but choose to file one, probably because it is more tax-efficient to do so.

If I was filing to minimise my tax from US-source investment income, I think you'd be correct.

But my US-source income is employment income (from doing enough business travel there from my US-based job to fall into the UK tax net), so I don't really have a choice in the matter.

None, because you're not any type of 'US taxable person'. In essence, they expressed their restriction poorly. If you look at the FATCA 'indicia'(**) in the US/UK FATCA IGA(***) you will see that yours would not be a 'FATCA reportable account'.

Great, thanks for the detail (I did post this hoping you'd respond )

I'd say just ignore this and open the account if you still want it. I have an account with Marcus, and can recommend it.

I understand what you're saying, but I'm going to leave this account alone - because if anything happened, I don't want to be in the position of explaining "I said 'no' to this question, although I knew the answer to the question as written was 'yes', because the answer to the question you meant to ask was 'no'"

And I can get the same interest rate from Kent Reliance, who sensibly (like most banks and building societies) only ask for countries of tax residence.

I'll email Marcus about it when I get round to it though...

EthicsGradient

It's worse than "anyone who has to file a US tax return", its' "anyone who has ever filed a US tax return". This was what the wording in the application process implied, and I thought "surely not", so I phoned their helpline, and they said yes, because I had filed US taxes for 2 years about 2 decades ago when on assignment there with my employer, I couldn't open an account.

OK, I could have lied on the application, but I felt uneasy about that, so I gave up. I suspect that Ed is right, and they just don't want any hassle of ticking a few boxes or collecting my old social security number or something. It's probably not a huge fraction of potential customers they're turning away like this, so they don't care.

koru

EthicsGradient wrote: »

It's worse than "anyone who has to file a US tax return", its' "anyone who has ever filed a US tax return". This was what the wording in the application process implied, and I thought "surely not", so I phoned their helpline, and they said yes, because I had filed US taxes for 2 years about 2 decades ago when on assignment there with my employer, I couldn't open an account.

OK, I could have lied on the application, but I felt uneasy about that, so I gave up. I suspect that Ed is right, and they just don't want any hassle of ticking a few boxes or collecting my old social security number or something. It's probably not a huge fraction of potential customers they're turning away like this, so they don't care.

I've just had the same experience. I'm disqualified as I filed US returns for when I worked there in 1995 and 1996. I would guess they are paranoid about FATCA, so they are just excluding anyone who has any US tax link, regardless of FATCA being much narrower.

koru

Actually, the current online process only asks if the applicant currently files a US tax return, so if you no longer file US returns, you can truthfully confirm what they ask. Bizarrely, if you apply over the phone they insist on broadening the question to whether you have ever filed a US tax return, even 20 years ago.

Cook_County

Rules me out then because I prepare US tax returns for a living. I file several hundred every year...

londoninvestor

EthicsGradient wrote: »

It's worse than "anyone who has to file a US tax return", its' "anyone who has ever filed a US tax return". This was what the wording in the application process implied, and I thought "surely not", so I phoned their helpline, and they said yes, because I had filed US taxes for 2 years about 2 decades ago when on assignment there with my employer, I couldn't open an account.

Oh dear! Shortly after my original post, I completed my 2018 tax filing, ending my tax obligations to the US (I no longer have the job that generated the US source income). So I never did get round to contacting Marcus but was quite close to trying again to open an account...

koru

londoninvestor wrote: »

Oh dear! Shortly after my original post, I completed my 2018 tax filing, ending my tax obligations to the US (I no longer have the job that generated the US source income). So I never did get round to contacting Marcus but was quite close to trying again to open an account...

Try applying online. They don't seem to ask about former obligations to file US returns.