THE TRANSATLANTIC MAGAZINE
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We recently reported the news that 'Accidental Americans' living in France could soon have their bank accounts closed due to US FATCA regulations. In breaking news today issued by US Tax Experts Bright!Tax, this problem now appears to be ready to affect Accidental Americans across Europe, including those residing in the UK.
The news update from Bright!Tax explains "it transpires that US expats who haven’t provided their foreign bank with their social security number or ITIN (Individual Taxpayer Identification Number) around the world are faced with the same issue ... The majority of those affected are so-called Accidental Americans, folks who either have an American parent but have always lived abroad, or who were born in the States to foreign parents who were there temporarily (as students perhaps, or just on holiday). In both scenarios, they may never have claimed American citizenship, but because they have the right to, they are still supposed to file US taxes. The most famous Accidental American is perhaps Boris Johnson, the current UK Prime Minister, who was born in the US and who received a US capital gains and back taxes bill 45 years later when he sold his UK home."
Labour MP Preet Kaur Gill recently raised the issue of FATCA and its affect on Accidental Americans in a letter to Prime Minister Johnson. With the UK Parliament set for a Brexit showdown this week, whether or not this matter is even near the top of the Government's agenda is debateable.
Explaining some possible options for Accidental Americans, Bright!Tax note that "Accidental Americans are faced with a very difficult situation. If they don’t have a US social security number or ITIN, they face losing their bank accounts. If they now get one though, they will have to start filing US taxes." Another option is Citizenship Renuncination, although as explained, "this also involves catching up with US tax filing first, and then paying a $2,350 renunciation fee."
In August, we asked UK Finance, the body representing UK Banks, for their response to what at the time was thought to be a France specific issue. They commented "The industry supports the European Banking Federation’s work with the European Commission and the US Treasury in this area and we continue to liaise with our members, HM Revenue & Customs, HM Treasury and the US Internal Revenue Service on this issue."
If you are an Accidental American worried about this situation, do contact a US Tax expert. Firms which specialize in US Tax can be found via our A-List Directory.
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