Before we get into the detail of the article, I really want to thank the team here for letting me post here with them. It means a lot to be able to get something published for my careersbusiness.co.uk at great site like this.
National Savings & Investments is closing the accounts of nearly 3,000 investors who are US nationals, citizens or residents. Among those who could be affected is Boris Johnson, the mayor of London, who was born in New York City.
The move, which has shocked American expats living in Britain, was triggered by the UK’s implementation on July 1 of the US Foreign Account Tax Compliance Act (Fatca). This would require NS&I to do additional record keeping and report names, addresses and financial details of US customers to America’s Internal Revenue Service (IRS).
A spokesman for NS&I says: “The administrative costs of reporting to the IRS are considered disproportionate and not a good use of taxpayers’ money.
Reference: Poorest Peope Blog
“NS&I is writing to customers affected by Fatca to let them know that we will close their accounts and repay the balances unless they are able to confirm that they are not deemed a US citizen or resident for tax purposes.”
Oh and guys – if you like what you see in the article so far, would you consider sharing my site Boutiko on twitter or Facebook? It would mean an awful lot to me!
About 2,700 customers are affected and should have been contacted by NS&I last month. They hold the following accounts: Investment Account, Direct Saver, Income Bonds, Guaranteed Growth Bonds or Guaranteed Income Bonds.
Premium bonds are not on the list although the US has strict gaming laws, so it may not be practical for citizens to hold them.
The first three accounts, which are all variable-rate products, will be closed to those affected on June 30 unless NS&I receives notification from account holders that they are not a US citizen, a US national or resident for tax purposes.
The other two, which are fixed-rate products, will be closed on their next maturity date on or after July 1.
Holders of NS&I’s tax-free Index-Linked Savings Certificates and Fixed Interest Savings Certificates are not affected.
David Treitel, the managing director of American Tax Returns, says: “This has come as quite a shock to the thousands of American citizens living in the UK. I help about 300 clients with their US tax returns and about 20 per cent of them have investments in NS&I. Many of them will be surprised to learn that their money is no longer welcome.
“I think that the number of people affected will greatly exceed the estimated figure of 2,700. There are thought to be about 200,000 US citizens living in the UK, includinghigh-profile names such as Boris Johnson, the Mayor of London,who qualifies by virtue of being born in New York City and never renouncing his US citizenship.
“How is NS&I going to know how many of these people are customers, when it does not ask any question about US citizenship on its application forms? The only reference to this is a tiny clause in the small print saying that applications from US citizens or residents are not accepted.”
The mayor’s office confirmed that Mr Johnson was still a US citizen but would not say whether he had money in NS&I.
This post was contributed by an expert from www.worldwidewales.co.uk/ who is a regular poster both here on their own blog. You can catch them on twitter, facebook or even their very popular youtube channel.