# IRS Implications of US citizen having UK savings



## v15ben (Feb 19, 2014)

Hi all,
Perhaps a confusing title, but let me explain more clearly:

My wife is a US citizen, living in the UK on a spouse visa.
She files taxes each year, FBAR/FATCA etc.
She wants to open a new UK bank account or savings account with approx £10k in as she has built up savings from her job.
Is there any problem/implication of doing this with a 'reasonable' interest income being earned from an IRS viewpoint?
We're a bit concerned the IRS might sting her for some tax implications/fee due to the amount of interest she could earn (up to say £500 over the year if her savings continue to build up).

Is this a legitimate worry, or is it a case of filing taxes as normal, giving maximum account balances and not having to worry about extra fees/tax costs due to the interest earned being in her name?

Thanks,


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## nyclon (Apr 3, 2011)

I've moved this to tge tax forum where you should get more input.


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## ForeignBody (Oct 20, 2011)

v15ben said:


> Hi all,
> Perhaps a confusing title, but let me explain more clearly:
> 
> My wife is a US citizen, living in the UK on a spouse visa.
> ...


No problem at all. The interest will need to be included in her 1040 and the balance in her FBAR/FATCA reporting.

Her main problem might be finding a bank that will accept a US citizen.


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## Bevdeforges (Nov 16, 2007)

What ForeignBody said. Though she shouldn't have too much trouble opening an account if it's a stock standard savings type account. (And those don't pay diddly as far as interest is concerned at the moment.)

Where the stuff will hit the rotary oscillator is if she tries to open an investment-type account. That gets into PFICs and all the overly elaborate reporting requirements. Though I know of plenty of folks who report such accounts as regular "bank accounts" (if they are held with the bank) and just report the earnings as "interest" and the accounts and balances with their other bank accounts on the FBAR. So far I have heard nothing about anyone having problems with this approach - but as with all things IRS it depends on your balances, your tax bracket and who knows what else.
Cheers,
Bev


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