Is it possible to invest in USD as a UK resident?

Jan 17, 2016 12:44:32 GMT james said:

Jan 16, 2016 20:41:07 GMT xyon100 said:

UK law implementing FATCA? Are you sure of that? As far as I can tell it's entirely US law that is implementing FATCA in the UK, given FATCA is not a UK law. I see no UK law saying banks have to report persons with US indicia to the UK government or to the USA, merely US law saying they will close the bank down if they don't get that report to the USA.

You're behind the times, even ignoring FATCA the UK has international agreement to share data with the countries where an individual is tax resident. So any P2P firm that has any customers who are not UK resident is going to have some extra reporting to do. In the case of FATCA the report is filed with HMRC as usual and HMRC passes it on to the IRS. There's a collection of UK FATCA-related regulatory documents that you might find interesting after reading the first two links. The core UK law you might be missing is in the Implementation of The International Tax Compliance (United States of America) Regulations 2014. That implements the treaty called Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United states of America to Improve International Tax Compliance and to Implement FATCA, 2012.

Because international agreements now cover effectively all jurisdictions or soon will, any P2P business might as well just get on with learning about the reporting requirements and collecting tax residence information (about all tax residencies, not assuming just one) so they can do the required reporting. If nothing else, they may well find themselves having to do it if a UK customer moves to the Isle of Man or Channel Islands, or to some other part of the EU. Given the trends there's going to be more of this in the future, not less, so I don't think that it's really avoidable work unless a platform is willing to pay out all future interest due to dump a customer who becomes tax resident outside the UK, possibly in addition to being tax resident in the UK, which is effectively what the US FATCA does.

It's also worth knowing that there are $50k and $250k thresholds that can reduce reporting requirements for existing accounts, eliminating the need to make a per-account FATCA report at all (though a nil return still has to be made to pick that option).

Jan 16, 2016 20:41:07 GMT xyon100 said:

Are you saying you send money monthly to the USA? Regular payments made to a US account are on the specific list of "US indicia" that UK banks are supposed to be looking for and report to the USA.

I do not regularly send money to the US. My knowledge of what account holders do is not limited to my own accounts.

The difference, James, is the UK is not required to report the presence of say, an Italian to Italy for illegitimate taxation purposes for Italy, when the Italian is entirely, physically and fiscally, resident in the UK and possibly a UK citizen to boot!

FATCA is a whole other animal and quite frankly, why the world is not up in arms over it beats the hell out of me. Oh yes, it's all painted out to be all about catching tax cheats, but the one cheating is the USA seeking to tax foreign earned income of people based in other countries, often CITIZENS of those countries!  In other words, US law has blackmailed the entire world in to enforcing US law outside of the USA in order to tax the world on pain of closing down any of that countries financial institutions that do not comply. That is outrageous.

And yes, the banks are scared to death.

As to reciprocity, there is none as it stands despite it being promised and even if there was, we don't tax Americans on their US income on the basis their parents were born in the UK and even if we did, can you imagine the reaction of the USA once it realises it's government is going to send the bank details of Americans to England so that England can tax Americans? Not going to happen, EVER.

I just personally hope that the humans rights cases (freedom to leave) bear fruit as well as the current court cases being brought against the Canadian government for riding roughshod over it's own citizens rights in order to comply with FATCA, and the case being brought in the USA for abusing the constitutional rights of Americans who are no longer resident or who never were.

Jan 17, 2016 13:44:46 GMT james said:

Jan 17, 2016 13:20:53 GMT xyon100 said:

The difference, James, is the UK is not required to report the presence of say, an Italian to Italy for illegitimate taxation purposes for Italy, when the Italian is entirely, physically and fiscally, resident in the UK and possibly a UK citizen to boot!

Italian residents have to report UK assets of any amount to Italian authorities and the UK and Italy have a data sharing agreement, as two of the currently 78 countries who have signed the Multilateral Competent Authority Agreement, with more planning to do so. The UK is required to report to Italy if the person is an Italian tax resident, as Italy is required to report to the UK if the person is a UK tax resident. But for legitimate taxation purposes only, of course, not illegitimate. This isn't reporting of mere presence, though, it's reporting of having an account. FATCA doesn't require reporting of individuals either, just accounts as in the MCAA.

Jan 17, 2016 13:20:53 GMT xyon100 said:

the USA seeking to tax foreign earned income of people based in other countries

So does the UK. I've had UK tax due on foreign income of mine, though passive rather than earned, and of course I have correctly declared this on my tax return along with the identity of the country where I received the income.

Jan 17, 2016 13:20:53 GMT xyon100 said:

often CITIZENS of those countries!

I'm a UK citizen and UK tax resident, I have to declare my foreign income to HMRC. So do you, even if it's only a penny you get to complete a tax return so you can declare it. To avoid this I would need not to be UK domiciled, to roughly summarise complex rules.

What the US does that is different from many other countries is have those who are not resident there also have tax paying obligations, notably for both US citizens and US green card holders.

Jan 17, 2016 13:20:53 GMT xyon100 said:

we don't tax Americans on their US income on the basis their parents were born in the UK

We just do it on the basis that they are tax resident in the UK. So does the US, the difference its that it considers people to be tax resident in the US by birth as well as location. Yet the UK has some birth-related rules in its domicile related rules.

Jan 17, 2016 13:20:53 GMT xyon100 said:

can you imagine the reaction of the USA once it realises it's government is going to send the bank details of Americans to England so that England can tax Americans? Not going to happen, EVER.

The United States is not currently a signatory of the MCAA.

I don't like FATCA or the reporting rules but I do at least try to know quite a bit about the things that I dislike. I'm essentially agreeing with your views while disagreeing with most of the things you have said are facts about the situation.

Your first point..... A completely different situation to the one I thought I had made clear. I KNOW an Italian tax resident is going to have his UK account reported to Italy.

Again, I am talking about a person who is entirely resident in the UK, and is in fact British. A British resident in Britain.  Does he get his UK account reported to Italy because he may have some sort of connection to Italy so Italy can send him tax bills on his UK income? No, of course not. FATCA forces banks, at the point of a financial gun, to report any American or even people they suspect of having connections to the United States of America even if they never lived there and are British, so the USA can tax them!

Your second point where you claim I am wrong. ...You claim the UK also taxes people on their foreign income. In the circumstances I mentioned, where a person is no longer resident in the UK in any way shape or form, the UK does NOT tax them on their foreign income. You don't need to explain what the USA does when it comes to tax, I am all too well aware.

FATCA is NOT like the many international agreements we have reporting the UK bank accounts of foreigners living overseas back to their country of residence, which are largely benign and only tax evaders need fear. It is about hunting down Americans (by any definition the US chooses to use, including British citizens citizens) in order to enforce a tax system around the world that is simply illegitimate and an affront to basic human rights.

The big laugh here is the USA agrees! Well, when other countries try it. The USA was, as always, the biggest mouth in the UN in 2011 when the UN slammed the one other country on the planet that insists on applying it's tax code to people who have long ago left, the vicious African dictatorship of Eritrea! The USA insisted Eritrea desist from taxing people who left or face sanctions, then set about implementing FATCA to hunt down anybody who left that the USA considered tax payers!

USA, biggest hypocrite in the world.

And it's not just about taxes, many effected will owe no taxes. What FATCA effectively does, combined with the punitive US tax code, is ruin peoples lives and not just that of the claimed the of the claimed "American", but also that of their families. You have two choices. Comply with the US tax code, a country where you may never have even lived and have your life blighted by accountancy costs, fear of DEVASTATING fines for something as simple as a mistake where no taxes were avoided/evaded, pressure within your family as the US tax code gets applied to them, inability to make proper financial plans, US taxes on things such as UK benefits payments to a British citizen!!! It makes life outside the USA impossible for those the USA claims as their own.

Or hide and hope of course, knowing the MONSTROUS and confiscatory fines may one day catch up with you and don't expect any sympathy, because you will just be told you should have paid you dues and stuck to the system, even though it was impossible to do so.

Canada is particularly badly effected by this, the Canadian government is in court over their decision to sign the IGA required to enforce FATCA in Canada. They have, in effect, run roughshod over the right of Canadians to be free of discrimination based on their origins. Meanwhile, as "Americans" the USA has run roughshod over their rights as Americans by requiring detailed reporting of all their financial lives down to the penny and imposing fines that could be described as confiscatory. Unreasonable search and seizure, a clear breach of the fourth amendment.

And guess where these "Americans" have to report the details of their lives to? The Financial Crimes Enforcement Network, FINCEN.

Here's the sort of situation that arises when a country decides to tax the citizens of other countries. A woman in Canada, born just over the border in the USA when the Canadian hospital was full. She spent days in the USA. She is a Canadian citizen, has been since she returned to Canada 50 years ago. She now has a child, a disabled child who is now a young adult. This young adult has a Canadian Disability Saving Plan. This is a savings scheme paid for by the Canadian parents taxed Canadian income and it is matched by the Canadian government, more Canadian tax payers money.

Because the Canadian child was born to an American, they too are American. This means the USA considers this disabled Canadian child's Canadian taxpayer funded savings plan to be an overseas trust owned by a tax paying American, and so taxes this trust to fund the USA?! You see anything wrong with this picture? That's just one of many, many totally unfair situations around the world being caused by this .

FATCA is NOT just another benign and equal tax information sharing agreement in order to enforce fair taxation, it is the imposition of US law in other countries, a law that is blighting lives and law that is wrong on so many levels. It IS a national disgrace that the UK, along with many others, signed up to this without studying the effects. Anybody who dismisses FATCA as just another tax sharing agreement has NO IDEA of the effects it is having on people.