To help you judge if,
your experience with your local bank, credit union or insurance company (or as the US defines them: “foreign financial institutions”) will be a comfortable one, as some advertise,
shared here are excerpts of notes from a meeting set up with a “US Person” and Canadian husband by a Vice-President of the wealth management branch of one of the Big Five Canadian banks:
1. ..all previous recommendations for changing investments have been done by telephone… In all the years as clients, they never requested a meeting with us.
2. re green card assumption and location of the company worked for (this question is one way to find out if a person has worked in the USA). *(see below)
3. Bank representative met with each of US Person and Canadian husband alone as they do not have joint accounts.
…wanted to sell US Person’s non-registered mutual funds and give the cash back to local branch of the bank (it is not worth their while “all the paperwork” to accept clients with less than $500K!!!!) US Person refused….had asked on numerous occasions for the names of PFIC compliant funds. At the end of the meeting he agreed to come up with a list of PFIC compliant funds. Until 10 days ago he did not know the meaning of PFIC. Asked why he would sell me mutual funds if other investment companies have known about the IRS rules since 2010. His answer: “we’re not expected to know – we ask people to check with their tax accountant” Then he asked ME if it is OK to have mutual funds in an RRSP.
4. … asked to do a review of our net worth. When I told him that for the past five years my annual gross income is about $23,000, he looked horrified. US Person says “I don’t think I fit the “wealth management” profile, even if I were not a US person.” He kept asking about credit lines – three times and looking at me each time. Non-US husband uses credit line. It is important the other US persons know that credit lines will count in their highest and year end balances for FBARs and FATCA tax forms 8938, and of course in the aggregate $50K US that the banks will report to CRA.
5. US Person asked him how many accounts the “wealth management” part of this bank has with Canadians with US connections. He replied “not as many as you think”. US Person said that she should have replied “by the time you get through with turning over all the names of people with US indicia, you could be looking at 200,000 or more (dividing the one million US persons among the big five) Canadian clients that you will lose!”
6. Same story about registered accounts being exempt – this V.P. could not grasp the concept of US persons being thrown under the bus (did not bother to try to explain – and his office spent hours writing letters etc. when my very savvy (sarcasm) IRS agent could not understand that the separate tax slips for each mutual fund were declared on both my Canadian and US returns. “This V.P. knew about the monstrous fine, but I am sure he must think that I am one of those tax cheats you read about in the newspapers.” AND, the head office used to issue 1099 forms, but this stopped in 2011.
Comment by US Person after this experience: Wealth management V.P. said that the reason for all the paperwork was because of 9/11 – does he think we are as ignorant as he is?!
Definitely an uncomfortable experience.
*US Person said from separate meetings V.P. assumed that Canadian husband had a green card and that he had lived and worked in the USA. Canadian husband wrote letter saying that he worked for an international company for almost 40 years in three different countries but NEVER worked or lived in the USA. He has only one citizenship, Canadian. Canadian husband told the V.P. that he did not have permission to send his Canadian citizen private financial information to CRA for onward forwarding to the IRS.
Canadian husband also asks for copies of all documents signed the day before (should they have been changed after the fact). …and finds it rather odd to have to give the name and location of the company he retired from 13 years ago (before 9/11), as a source of investments.
@USFP, exactly. It’s a control freak issue from a narcissistic government.
FATCA by banning U.S. customers prohibited discrimination
10-04-2014
American X lived since 1970 in the Netherlands and the U.S. also had besides the Dutch nationality. He had an investment account with BinckBank ( ” Alex” ) . As of December 1, 2013 ended BinckBank service , because X had not shown that he is not liable to tax in the United States . X accustomed itself to the Board for the Protection of Human Rights and suggested that BinckBank had made. Prohibited discrimination on grounds of nationality BinckBank argued that it had terminated because she refused to comply with the obligation resulting from the Dutch legislation in response to air- relationship of all 150 U.S. clients who met the definition of ” U.S. Person ” , used by the U.S. Internal Revenue Service ( IRS ) the U.S. Foreign Account Tax Compliance Act ( FATCA ) to provide . all transactions and historical transaction data by U.S. persons to the Dutch Tax Authorities According BinckBank the distinction was based on a generally binding regulation , because the closed on December 18, 2013 between the Netherlands and the U.S. Intergovernmental Agreement ( IGA ) for the implementation of FATCA forced her to do so . The Board left open the question whether the IGA was a generally binding regulation , because the IGA BinckBank no borrower would have to close its service . Persons because of their U.S. citizenship The Board also rejected the appeal by BinckBank reasonableness and fairness , as the FATCA imposed far-reaching obligations brought disproportionately heavy burden . The legislature in the General Equal Treatment Act ( Equal Treatment Act ) explicitly states that direct discrimination on grounds of nationality was not only banned , as was included in the Equal Treatment Act itself exception applies to the ban . Remuneration of the appeal made by BinckBank reasonableness and fairness would be contrary to the closed system of the Act. The Board concluded that BinckBank had made in the provision of services . Unlawful discrimination on grounds of nationality
http://www.futd.nl/fiscaal-nieuws/7286/door-fatca-weren-van-amerikaanse-klanten-verboden-onderscheid/
Here’s the Google translation from a recent comment from Dutch to English.
Hey it says that they may be paid ‘renumeration’ perhaps there’s a profit opportunity from the banks. If they refuse to open your account based on nationality, there may be grounds to go after them as well.
@Don
This would also be a breach of the Equalities Act (2010) in the UK. Denial or closure of accounts based upon nationality or national origin has already being challenged in the courts under the Equalities Act:
http://www.theguardian.com/world/2014/mar/28/iranians-uk-banks-closed-accounts-claim-racial-discrimination
@Creature, cheers for that.
From your link;
“Lloyds said in a statement: “While we cannot comment in detail on specific cases, it is important to stress that Lloyds Banking Group does not close accounts based on ethnicity; indeed, we do not ask our customers to disclose this information to us.”
That statement is FALSE, Lloyds Group IS asking for that very information. They are one of the High Street Banks asking for place of birth in account opening.
Is asking for place of birth rather than “discovering it” on account opening ID a breach of the Equalities Act?
@ NotThatTara
The link to the ConsumerFinance site is a great idea; it should be reposted regularly during the next few months so we all can deluge them. When hubby and I returned from wintering down south, I went to my bank to ask them who to deal with in terms of my CLN; they of course knew nothing and provided me with false reassurance (the teller) and an ear-whipping (one of the junior managers who was so full of ego that he couldn’t acknowledge that he didn’t know the truth) and the new local manager (age about 25) had an OMG moment.
I actually feel sorry for these poor front-line folks – – they are going to have a rough time of it soon (tho each local bank office is not going to necessarily have/know that they have any US “Persons”and I think the head office in charge of implementing FATCA would likely prefer to keep the small-folk in the local branches ignorant so that the local tellers can just be friendly and smile and the FATCA office can be protected from too much flack. But how do we get connected with the FATCA office of our bank?
BTW, whoever posted the green Spanish Inquisition chair, this was very well done, very appropriate, but please remove the bank name and logo – – we really do not want to be sued for copyright infringement…
And, on another topic totally, can anyone out there tell me on what page of this massive (and growing) IBS site one can share one’s FEELINGS about the renunciation act? My appointment is in 2 days, and I will post about my consulate experience, but is there somewhere that I can vent/share/moan a bit about the non-factual personal deep-gut angst of this loss/giving up of a piece of my identity (very deeply rooted since I lived in DC for the first 18 years of my life & all my family was born there too, even in my parent’s generation!!!!!)? Thanks (Thanks again, Charl – – YOU DEFINITELY GOT IT!!!)
LM,
There are several conversations on Isaac Brock that have comments of FEELINGS about renunciation. Atticus has an especially good one on this post: http://isaacbrocksociety.ca/2014/03/31/more-on-feds-bury-fatca-law-in-budget-bill-w-no-mention-in-press-release/comment-page-2/#comment-1349960
I often read this and identify with this post: http://renounceuscitizenship.wordpress.com/.
@George
What could be of interest (especially to British Brockers) is that this may present a legal precedent by which account closures based on ethnicity or national origin can be challenged in the courts. At least there appears to be a group of solicitors which have taken similar cases and it appears that they may have forced one of the banks to back down:
http://www.ft.com/cms/s/0/99b0115a-698d-11e3-aba3-00144feabdc0.html#axzz2yqDxtpkK
@Creature, I have this nagging thought that asking Place of Birth is the proverbial nail in the coffin and could not/should not be done. If that question is not asked, only ask Citizenship, some of the noxiousness goes away.
Remember not all banks are asking the question, there is a reason for that.
@ calgary411
Thanks for pointing me in the right direction. I can so totally relate to these comments.
@LM, the feelings involved in all of this are going to swing wildly from person to person. FATCA is SO all encompassing. Some swept into it never wanted U.S. citizenship to begin with, some were told they lost it decades ago and had lived in that knowledge all this time, some didn’t want to lose it but, could not function where they live or protect foreign family if they kept it. Catch 22 situations are rampant.
I didn’t want to lose mine. To me it was like divorcing a difficult at times parent but, my parent non the less. Children move away, they marry, they create their own lives but, rarely do they have to cut off ties with their birth rights when they don’t want to. Perhaps this hit me somewhat harder due to their having been five deaths in my family the year I found out about FATCA and on top of that now losing my citizenship, I feel rudderless and like I’ve denied a big part of my identity. However it IS necessary. I couldn’t justify keeping it. I could not do it. My beef with all of this is that no one should be forced into a situation where they do not wish to deny their birth right if they didn’t want to and no one should have to keep such ties if they wish to lose them. Period. People should have the freedom to not be entrapped AND the freedom to live and marry abroad while not having to make such draconian decisions. The path to make these decisions for yourself needs to be made easier and fair for all. CBT simply creates too many harsh conditions for people that have NOTHING to do with taxes.
Feelings on this process are going to be all over the map with some very common ones involved for everyone. Resentment at being treated like second class citizens HERE and THERE.
My appointment to renounce went smoothly and wasn’t as hard as the working up to it part or in some ways the feelings afterward. It is what it is. They’ve not given people much choice in the matter. And in the end your family will be free and some people here don’t have that option. People’s situations are all so different and complicated. My plans to go back and live with a sibling if something happened to my spouse are over and done. I don’t have much family here so that could have a lot of consequences for me that I don’t relish facing as an elderly person. EVEN SO. This is a decision that for so, so many is a non choice. You cannot live, bank and save here like everyone else and neither can your family. That’s not a choice.
Despite all the problems at least some of us can find ways to deal with these problems as ugly as it is. Some can’t.
I’ve derailed this thread @LM so here is my email atticus in canada at gmail dot com.
There are many more if you check the Archives. They are all worth the read as you are facing your own emotional responses to yours. Best to you — be assured you have the support and understanding of your feelings here.
@Atticus, I hear you!!! I feel exactly the same. It saddens me that I no longer will have the option of returning and living near my brothers (or to take care of my parents) if widowed…I have no children. It was a Sophie’s choice but concluded that renouncing was the only way I could live a normal life here in the UK.
@George
Is Lloyd’s closing accounts en masse?
Binckbank was quite open about what it was doing. Its unwillingness to give accounts to U.S. persons was in its terms and conditions even. This might be harder to counteract if firms that are less open.
I can’t see anything in Lloyd’s terms and conditions that is that suggests that they are closing accounts (just that the info will be handed over, but that is FATCA, not something the bank is choosing to do).
@ monalisa
If you haven’t paid 10 yrs of US social security then you would not qualify for Medicare.
What kind of life would you have in the USA if you were widowed, had kept your US citizenship and decided to move back there? As you get older and need healthcare you would be crippled financially by living in the US. Any kind of medical insurance you would be lucky to find would also be full of ‘exclusions’ for pre existing conditions. At least the NHS will fully take care of you.
@Heidi, true, true. :/
@monalisa – Medicare is worse than ten years, it’s 48 quarters or 12 years. Also @CreatureOutside I made an enquiry to the firm of solicitors who handled the Iranian case, I have yet to receive a response.
@Publius, The article has a representative of Lloyds Group stating that they do not ask the question of origin. That reply is utterly false as evidenced by the online application process which asks place of birth.
I think the law firm would be well served if they knew that Lloyds was making statements that they do not ask origin while at the same time they are asking!!
Remember, ALL IGA agreements are the same, there was never any political negotiations. Having said that, the CRA has the best guidance information out there.
Again, I think asking place of birth is discriminatory in many jurisdictions as it serves no reasonable purpose other than to discriminate.
I am being pre-emptive, this is the guy at RBC that handles my finances which is fortunately just my mortgage (no potential FBAR fines due to my knowledge):
Wilfred — are you aware that Royal Bank has to tell the Internal Revenue Service of the USA about all Canadian account holders who are “US persons”. This is starting July 1 2014. Royal Bank may have a record of my relationship with the USA as I may have used my US passport to open my first RBC account in 1985 in Toronto. (I moved from the States at that time; since then I have always been in Canada and am a Canadian citizen for 14 years now). I renounced my USA citizenship last September mainly because USA want to tax their citizens wherever they live. I actually have had no US taxes due for the 29 years I have lived in Canada, but it is a hassle to file forms every year and also USA has heavy fines if you do not report accounts (FBAR).
If there is USA indica on my records with RBC, I can bring by my “Certificate of Loss of Nationality”. I do not want RBC to report me as American, as I am not anymore. If it is accidentally done I will forever be in USA tax harassment.
-K.
@Kermitzii, I have to also remind myself to make an appointment at my local building society to explain to their manager that I’ve expatriated… but I would have thought that the main risk of not doing so would be hacked data rather than harassment by the IRS. I wonder if there will be cases of former citizens being hassled by the IRS though, especially those who haven’t filed 8854.
@Don
Cheers for contacting them but very disappointing if you don’t receive any reply. Don’t know what to make of that other than the message is “discrimination against this group of British citizens is bad and we’ll fight it, discrimination against this group of British citizens is OK and we can’t be bothered”. I would hope that the overriding principle that discrimination against *any person* based on national origin breaches the law and is wrong would a least stir their interest in similar cases.
What I found was particularly alarming about the Iranian cases when they were initially discussed on BBC Money Box, was that the banks just closed the accounts on these people and initially refused to offer any explanation other than ‘come to bank, collect your money, and leave the premises’ . Apparently, the banks felt that they were not compelled to give any explanation to the account holders. Just account closed.
The bank guy replied and he said I have absolutely no US indica. He knew about FATCA and sent me an 8 page PDF written by Royal Bank that was very comprehensive, even a part on renouncing (as a valid alternative). It mentioned all the forms one fills out to comply with the IRS. It is called “Tax Planning for U.S. Citizen Residents in Canada” and I put the pdf on my website:
http://www.genetics.forestry.ubc.ca/ritland/taxplanning.pdf
Its actually 16 pages.
Actually that document is here:
http://dir.rbcinvestments.com/pictures/account-chris.stepien/marketing%20-%20article%20of%20the%20week/tax%20planning%20for%20us%20citizen%20residents%20in%20canada.pdf
There are many documents about the problems Americans in Canada face at
http://dir.rbcinvestments.com/scroller_view.asp?content_id=50406
The other banks also have info like this….
Conversation overheard in RBC branch:
Bankster: So Mister: Are you by any chance an American by birth?
Customer: Funny you should ask me a question like that because I was going to ask you a little about yourself. Since you have a lot of information about me I, in return, want to know where you were born and what your citizenship is, where exactly do you live including home address and phone number and bank account number. I would like to know the nationality and race of your wife if you have one, or your male lover or the pet dog you sleep with. I would like to know a little about your children like what school they go to. How about the nationality of your parents? How many passports do you have?
Bankster: Why do you want my personal information about my private life and affairs?
Customer: EXACTLY!
Bankster: Hmmm never mind, I don’t really want any information on you. I don’t want phone calls in the middle of the night, I don’t want stalkers, I don’t want trouble with you so please leave and forget I even asked these questions, it wasn’t that important, have a wonderful day Mister.
Customer: Listen Bud, don’t tell me what kind of day to have!
@CheersBigEars-love your post about conversation overheard in RBC branch. I am gonna take customer’s response and hang it on my wall in case I ever get asked the same questions…. and like ML 1776 need to make the appointments at my banks with my golden ticket…