FATCA Dual National (UK USA) no Social Security number

creep_pea

Hi,

My Girlfriend who I share a bank account with has received a email asking for her Missing Overseas Tax Identification Number "We need you to provide some information.

Our records indicate you may have tax obligations in another country. Under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) we need to hold certain information if this is the case."
We've rung our bank up and they have asked for her Social Security number but as she left the US when she was 2, she doesn't have one, the bank said she needs to get one is this right?

She has a UK passport and considers herself a UK citizen, she's lived here permanently for 30years. We've read a fair bit about been a accidental American, I don't think she earns anywhere near the threshold that is in place before she would be required to pay any US based tax but I've paid some large amounts of money into our joint account during this last year so possibly this may have triggered the bank to ask for this information.

I've seen a few people saying it is easiest to renounce here US citizenship which she doesn't really want to do but will if necessary, we've also seen that it cost quite a lot of money to do this.
The other option is to try and get a US Social Security number but it sounds quite difficult to obtain and you have to go to the US embassy or military base so I guess due to the current COVID19 situation she'll not be allowed anyway.

Does anyone have any advice or know what will happen if we just ignore it?

Thanks in advance for any help given.

unforeseen

Have a read of https://1040abroad.com/faq/renouncing-u-s-citizenship/

Lomcevak

If she was born in the US and left when she was 2 then i'd be very surprised if she didn't have a SSN, even if she doesn't know what it is. It's easy to get replaced via the US embassy if you need to. Most likely ignoring it will prompt follow-ups until the account is closed, so I wouldn't do that.

You say "She has a UK passport and considers herself a UK citizen" but then "it is easiest to renounce here US citizenship which she doesn't really want to do", so you need to take a decision there, but for what it's worth, we are a family of dual UK-US nationals living in the UK and generally if you're under the earned income exemption (we are) it's not that bad - worst bit is the occasional frustration with the increasing number of UK financial services companies who have taken the decision that it's easiest to automatically ban account opening from any and all US citizens rather than deal with FATCA. US tax returns need to be done each year, but with no US income they are simple. There are also a few gotchas to be aware of with some UK financial products that the US doesn't recognise, e.g. ISAs, but nothing particularly severe for people on 'ordinary' incomes.

TL;DR - unless she decides to renounce, get a replacement SSN, file a US tax return (look at streamlined filing compliance procedures), and if she's likely to have income above the exemption, large savings (especially using tax shelters), or inherit a significant amount in the US, then get specialist advice.

dunstonh

She has a UK passport and considers herself a UK citizen,

But is she actually a UK citizen?

US law regards children born in the US as US citizens whether they live in the US or not.  US law requires US citizens to file US taxes reporting their global income (although as mentioned higher up, this is often a non-issue).   The US does not recognise most UK tax wrappers.  e.g. ISA. It doesn't recognise the personal savings allowance either (the £1000 in interest you can earn tax free) or the dividends allowance.   Investment property. shares and other assets are where Capital gains tax is a difference (just because you don't pay it in the UK does not mean you are not subject to it under US tax laws).  There is potential taxation on your primary residence when you sell that.

We've rung our bank up and they have asked for her Social Security number but as she left the US when she was 2, she doesn't have one, the bank said she needs to get one is this right?

As she still retains US citizenship, then yes. 

The other option is to try and get a US Social Security number but it sounds quite difficult to obtain and you have to go to the US embassy or military base so I guess due to the current COVID19 situation she'll not be allowed anyway.

She may already have one and its just a case of finding it out.

It's not just FATCA that is the issue. Although, it is the high profile one.  Most mortgage advisers and financial advisers in the UK cannot deal with US citizens as their liability insurance does not provide coverage for US citizens.  Some providers will also exclude US citizens for financial products for liability/risk issues as well (where FATCA may not be an issue).

Does anyone have any advice or know what will happen if we just ignore it?

Don't ignore it.   It may cause a future tax issue (such as from property sale, inheritance or capital gains).  With data increasingly shared on taxation, with the main objective to find people who have been avoiding it, you could regret burying your head in the sand.

creep_pea

Thank you for the replies!

But is she actually a UK citizen?

Yes, her mum is British and she was registered at the UK consulate at birth, she has a UK passport and National Insurance number.

Sounds like we're best finding out or getting her a Social Security number and filing US tax returns as she should be way under the threshold even if they include half the money I've also put into the joint account.

atush

"US law regards children born in the US as US citizens whether they live in the US or not. "

Just for information, this may no longer be the case in future.  I believe the trumpster has put an end to automatic citizenship for all births in the USA.  Or is in the process of doing so.

Lomcevak

Lomcevak said:

US tax returns need to be done each year, but with no US income they are simple.

And as an unexpected bonus, it turns out that doing this is enough to make you eligible for the US economic stimulus programme - much to my surprise, a couple of quite large cheques (sorry, checks) dropped through through my UK letterbox this morning.