# UK joint bank account and US IRS FATCA?



## Water Dragon (Jun 28, 2011)

My husband wants to either add me to his bank account or open a new account in my name (which I'm thinking will require his name as well since I'm new here). I am retired and have no income for US tax purposes, but know I'm required to file anyway, which isn't a problem.

My question is - if he adds me to his account, even though I have no income going into it, will his account then fall under the FATCA requirements if it is equal to $10,000 or more? In other words, does having my name on his account (essentially his earnings) make us liable for US taxes or reporting requirements? 

I don't want to entangle his finances into US tax rules since I won't be contributing to the account(s). If we opened a separate account for me, it would only be for savings, gifts, etc. and would never reach the FATCA reporting amount of $10,000. Would it be better to explore that option?

I won't be receiving my Social Security for many years so won't need a depository for that for a long time. 

Any advice or guidance for US IRS considerations would be greatly appreciated.

Laurel


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## kyla4u (Oct 23, 2013)

*US/UK Joint bank accounts*

Hello,
Unfortunately, if you have a joint bank account with your UK husband and you are a 'US person', then your entire joint account would become reportable. However, the $10,000 that you speak of is in reference to the FBAR requirements and not the FATCA requirements. 

Let me explain briefly your filing requirements:

Each year as a US citizen, you are required to file federal tax returns on your world-wide income with the IRS. There is plenty of guidance on this on the IRS website and as I'm a new member I can't post URLs.

Secondly, you may also be required to file an FBAR (or form TD F 90-22.1) with the Treasury Department (NOT the IRS!) on an annual basis. This is the form you were referring to. Filing requirements kick in if the aggregate balance of your 'foreign' accounts goes over $10,000 at any point during the year and must include joint accounts. It is not a tax collection form, but a report of all of your foreign financial holdings. The deadline is the 30th of June of each year and it must be received by then. Failure to file one of these things is a criminal offense and carries heavy, life-altering penalties. 

Third is FATCA. FATCA is a regulation that was signed into law with the HIRE act of 2010 and will go into effect on the 1st of July 2014. This law requires all foreign financial institutions to report account data on any US persons with holdings of more than $50,000 to the IRS on an annual basis. If the foreign institution does not do this, then they will lose 30% on all US monetary transfers/payments. The UK has signed an agreement with the US some time ago to comply with this law, so do expect that if your bank knows you are an American, your account details (including joint accounts) may be reported to the IRS by the UK government. While you may not have (or never have) $50,000 in an account in the UK, there is nothing stopping financial institutions from reporting on ALL their US citizens instead of those with more than $50,000. 

I hope that helps you make some decisions.


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## AnAmericanInScotland (Feb 8, 2012)

WaterDragon, I'm in Angus. When I was granted the LTE (spouse) the banks here declined to accept me as a customer because I didn't have an ILR. Now, after the ILR was granted (June 2013) they are declining me owing to FATCA. 

Trust me I don't have $50K lying about, but their reasoning is that eventually (sooner rather than later) the IRS will try to get info on ANY money-ANY amount an American has access to - signatory, joint, etc, and they don't want the hassle. So when my husband tried to put me on the checking account they didn't want to do that either. 

Puts me in a very strange position - 'Honey, can I have the debit card so I can go shopping?' Wowsa, haven't ever said that and it feels very, very strange! We have a great marriage but I was always taught to maintain some financial independence...

I'm also hearing rumours that expats with US based accounts are having their accounts closed - not clear if that's FATCA related or not. So far my bank hasn't said anything but it does have me worried because my private pension pays my UK medical-dental insurance premium and I need that to keep going!

ETA - I had an accountant in Edinburgh doing my taxes but he retired. I suggest if you have questions a good expat tax accountant (Edinburgh was easiest for me, but Perth and Aberdeenshire have good ones too) will be the best place to get answers. 

Also, out in the main forum lobby (see the nav bar above) there is a tax related forum for all expats. A few people have started threads but the info Kyla4U posted is as comprehensive as I've seen in that sub-forum.


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## Water Dragon (Jun 28, 2011)

kyla4u said:


> Hello,
> Unfortunately, if you have a joint bank account with your UK husband and you are a 'US person', then your entire joint account would become reportable. However, the $10,000 that you speak of is in reference to the FBAR requirements and not the FATCA requirements.
> 
> Let me explain briefly your filing requirements:
> ...


Thank you for the clear and complete information - I really appreciate it! 

These new laws are causing some very serious complications for anyone who wants to live outside the US. Several newsletters I subscribe to are discussing how foreign banks in many countries are either closing any US accounts, or requiring the owner to pay ridiculous annual fees to offset the "additional expenses" to monitor their accounts.

This is very upsetting considering my future plans involved living in at least a couple different countries throughout the year. I was really hoping to be independent of US banks. Now I don't know what options will be available. Guess I will have to investigate a US bank larger than my local credit union so I can at least have a debit card that will work out of the country - IF they will let me hold an account while living out of the country.


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## Water Dragon (Jun 28, 2011)

AnAmericanInScotland said:


> WaterDragon, I'm in Angus. When I was granted the LTE (spouse) the banks here declined to accept me as a customer because I didn't have an ILR. Now, after the ILR was granted (June 2013) they are declining me owing to FATCA.
> 
> Trust me I don't have $50K lying about, but their reasoning is that eventually (sooner rather than later) the IRS will try to get info on ANY money-ANY amount an American has access to - signatory, joint, etc, and they don't want the hassle. So when my husband tried to put me on the checking account they didn't want to do that either.
> 
> ...


Thank you for sharing. Yes, I have heard of banks closing American accounts too - specifically in Panama. The alternative is some places are now charging an annual fee to offset their "expenses". This is really a terrible situation for any American who wants to live outside the country; I was planning on retiring to a couple of places in Central or South America and this isn't helpful.

What in the world are we supposed to do???  My husband wants me to have some independence and security but this scenario is unacceptable. An US citizen has no choice but be chained to the IRS, but I refuse to allow them to trap my husband into their mess. 

I'm going to try for a small savings account and it will have to have a debit card as hardly any businesses here take checks any more. I'll also have to look into a larger bank back in Maine and see if I can have a debit card that will work out of the US. My current credit union is too small and my current card isn't allowed to be used in most of Europe (including the UK).  If nothing works out, I will start dealing exclusively in cash and then no one can give me grief about it. Considering my total MIGHT be a whole whopping 100 - 200 pounds, it is totally insane. 

If you have any further advice on adjusting to things in this gorgeous country, I'd appreciate hearing it. Thanks!
Laurel


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## AnAmericanInScotland (Feb 8, 2012)

Water Dragon said:


> Thank you for sharing. Yes, I have heard of banks closing American accounts too - specifically in Panama. The alternative is some places are now charging an annual fee to offset their "expenses". This is really a terrible situation for any American who wants to live outside the country; I was planning on retiring to a couple of places in Central or South America and this isn't helpful.
> 
> What in the world are we supposed to do???  My husband wants me to have some independence and security but this scenario is unacceptable. An US citizen has no choice but be chained to the IRS, but I refuse to allow them to trap my husband into their mess.
> 
> ...


My bank is a large US chain (started out as a regional but you know how that goes!) and I've had so much trouble using my debit card that now I just transfer funds into my husband's account (and the fees for that are a bit ouchie depending on the amount I transfer, btw). It's a serious problem but Uncle Sam thinks if we're expats we're rollin' in it and have $$$$$$ hidden away. Grrrrr. 

My worry is that my bank is going to close my account and then what?! Right now it's my miniscule private pension, but put with what will be an even more miniscule SS, it's money that would ease things, it's money I earned, and the IRS is making it very difficult. 

My husband pays the insurance from his checking account, and I deal in cash unless I'm buying something online. Honestly, I feel like a teenager 'getting' money from Dad. 

I'm not prepared to give up my US citizenship though. Others have done in light of this banking-taxes added hassle but something about giving that up makes me very uncomfortable. I do plan on applying for British citizenship when eligible but I planned on keeping the US one as well. 

Please let me know if you are able to open a savings account - so far I've not been able to do that, either. So cash stays in my husband's account. Although, all of this is making The Bank of PosturePedic look more appealing!


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## Water Dragon (Jun 28, 2011)

AnAmericanInScotland said:


> My bank is a large US chain (started out as a regional but you know how that goes!) and I've had so much trouble using my debit card that now I just transfer funds into my husband's account (and the fees for that are a bit ouchie depending on the amount I transfer, btw). It's a serious problem but Uncle Sam thinks if we're expats we're rollin' in it and have $$$$$$ hidden away. Grrrrr.
> 
> My worry is that my bank is going to close my account and then what?! Right now it's my miniscule private pension, but put with what will be an even more miniscule SS, it's money that would ease things, it's money I earned, and the IRS is making it very difficult.
> 
> ...


LOL - "Bank of PosturePedic"!!! That will be my way to go if I'm backed into a corner. If the government forces us to take drastic action then we can just as easily drop out of the establishment as easily as we joined it.

I also intend to go for British citizenship and then will need to decide about the American issue. Without getting too political, I'm very unhappy with the way things are going in the US and am strongly considering drastic actions in the future if necessary. It makes me very sad, but in my opinion, such decisions are being forced upon us as evidenced by this very conversation. My concern is that once strong control over our personal finances is fully in place, controlling our international movements isn't far behind. I think more than one passport may become a necessity if we want to continue as expats.

I will let you know how things go and if I find any solutions. Considering the terribly low interest rates, The Bank of PosturePedic may have just as good a return.....


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## kyla4u (Oct 23, 2013)

Water Dragon said:


> What in the world are we supposed to do???  My husband wants me to have some independence and security but this scenario is unacceptable. An US citizen has no choice but be chained to the IRS, but I refuse to allow them to trap my husband into their mess.


There are some things you can do - although it won't help in the short term. You can help by being verbal about your feelings with the US's crazy tax laws.

The US is the only country in the world (besides Eritrea) that taxes based on citizenship instead of residency. The rest of the world realises that it is pointless to try to chase down expats and wring mostly non-existent money from them. Because of the US's citizenship-based taxation system, FATCA is making our financial lives miserable.

The ACA (American Citizens Abroad) are looking for examples of US citizens being shut out of banking due to FATCA. They are fighting very hard in Washington on our behalf. So, if you are willing to contact them and share your story, please do.

There are other organisations, like the Isaac Brock Society and the Maple Sandbox who are actively opposing FATCA. Both of these organisations are Canadian, but they are accepting of all US Expats and are fighting everyone's corner. Canada has been particularly hard hit with FATCA as there are over a million US Expats living in Canada.

Lastly, if you still have ties to the US, then please contact your congressional reps and let them know how you feel. The ACA have a standard letter you can use.


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## AnAmericanInScotland (Feb 8, 2012)

kyla4u said:


> There are some things you can do - although it won't help in the short term. You can help by being verbal about your feelings with the US's crazy tax laws.
> 
> The US is the only country in the world (besides Eritrea) that taxes based on citizenship instead of residency. The rest of the world realises that it is pointless to try to chase down expats and wring mostly non-existent money from them. Because of the US's citizenship-based taxation system, FATCA is making our financial lives miserable.
> 
> ...


Thank-you for this - I will be looking up the ACA this morning. 

Something else I'm thinking of doing is finding a new accountant who would meet with a group of USCs in Scotland at a central location for a two-three hour explanation-Q&A. If we pooled our money we could cover his/her expenses. Not sure if it's possible but I have emailed a solicitor friend for recommendations of someone he thinks might be willing (at the very least this person would be getting my taxes business unless terribly expensive so it might be well worth it to him/her as well as to us).

One of the things about giving up my citizenship (very low on the list of whys) is that I'm 99.9% sure giving it up means losing my SS. I'll have to look into that, too. As said before it's not something I am at all keen to do but WaterDragon is right about the way things are in the States now, and makes some very good points!


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