Renunciation and Relinquishment Questions – Part 1 of 2
Ask your questions about Renunciation here.
This thread will be focused closely on renunciation questions and answers. If the conversation starts to ramble, those comments will be moved to another thread.
Sub-topics (more will be added as they occur):
Farrell v. Tillerson. Plaintiff is contesting Bern Embassy’s rejection of his CLN application due to his not having appeared in person at the embassy and his having been issued a passport after the relinquishing act.
Previous Renunciation Threads:
Renunciation and Relinquishment of United States Citizenship: Discussion thread (Ask your questions)
These above two lines are not showing as links on my screen, but they do work as links.
***
This thread is now closed. Please comment on Renunciation and Relinquishment Questions – Part 2 of 2
The above sentence does not appear as a link on my screen, but it does work as one.
You can have it paid in to US account and transfer it when is convenient to open a UK account.
I did this for a while and used a forex company (for a large sum) when the exchange rate was good, much better than bank rates.
The witholding tax is 0% for the UK
@Denise
Alternatively if you can continue to use a US address ((friend or family) you can continue to have SS paid into your US account and use a US credit card in the UK. Some such as Capital 1 give a great exchange rate, usually the interbank rate( the rate banks lend to each other) + 1%.
Social security exchange rates are also pretty good.
The SSA will pay it into your UK bank account in sterling. UK-taxable (zero US withholding).
@Phyllis Henderson
Thats what I said, but Denise does not have a UK account at present, so I gave her alternatives to use in the meantime.
Once my daughter and I leave the US there will be no one here. I already have a Capital One card but will they be interested with no US address. I do have a TransferWise Borderless UK account as well as a US one but I want to try and avoid filing FBAR. When my house sells I will have to go and talk to the SS people I suppose
@Denise
You do need a US address to keep your US credit card, perhaps you have a friend who will let you use theirs until you are sorted? It’s a useful way of accessing and paying with your US money.You can get your statements and pay online.
If you have a UK passport with a non US birthplace it shouldn’t be difficult to open a UK account as long as you have a UK address to use. Of course you can’t renounce until you leave the US, but you could leave the proceeds of any US house sale etc in a US bank until you have a CLN in hand to show your UK bank and avoid FBAR, as they will be bound to ask why a large sum has arrived from the US. Keeping a US bank account with a foreign address doesn’t seem to be a problem. I still have mine.
I don’t know anything about TransferWise Borderless accounts but you could call them and compare their exchange rates with a FOREX company. I used Moneycorp who give you a ‘Preferred Rate’ for a large amount and you can set a ‘spot rate’ with them where you can watch the rates online, chose the rate you would like to achieve and they call you when it reaches that rate. Don’t let your US bank change and send your money, their rates are terrible.
That is what I did when I retired back home.
PS Denise
I just checked out TransferWise and they seem to be a FOREX company much like MoneyCorp, they quote a 0.85% on the interbank rate for dollars to pounds, I believe moneycorp offer much lower than that, but you can check. However I think you do need a receiving bank in the UK for your funds.
I am a Brit born and bred but no UK address to use at the moment plus I have to show I think 3 months of utility or rental agreement. I shall have to see about getting a mailbox in the US that will forward any mail. I have a TransferWise Borderless account both in the UK and US and can easily transfer between the two.
What is a CLN.
I believe CITI bank are closing accounts with a non US address and I have a pension from my late husband’s company being paid into that. I don’t think my “regular” bank will keep my account open either so the sale of my house proceeds will go into my US TransferWise account as will my SS payments
A CLN is a Certificate of Loss of Nationality, which is issued to you by the US State Department after you’ve paid your money and sworn the oath of renunciation, and they’ve checked all the various crime and terrorism watchlists etc to make sure you’re not a wanted person. You should get it a few weeks after renouncing; in the meantime you can show the bank the receipt from the Consulate if need be, when opening an account. As you say, proving UK residence is likely to be the most time-consuming issue.
@Denise
Bank of America let you have an account with a foreign address , it all depends on the bank but if Transferwise borderless lets you have access to Sterling then I guess that’s the way to go , its a shame that their exchange rates aren’t as good as MoneyCorps and a house sale will involve a large sum of money. I believe I was charged 0.2% over the interbank rate for a large amount .
PS Denise
Forex companies such as Transferwise have a FATCA requirement to report foreign money transactions to the US , so if you want to avoid filing an fbar then probably best to leave your house sale funds in the US until after renunciation, (if your US bank lets you keep an account.)
As I understand it, Transferwise lets a sender put the money that is to be transferred into TW’s own account in Country A, and lets a recipient retrieve an equivalent sum from TW’s account in Country B.
The sender actually has only a “virtual” US account, and the recipient (albeit the same person) has only a “virtual” UK account.
No doubt transfers from the US get reported under some regulation or other; and no doubt the US sender has an obligation to report their “virtual” UK account as a foreign account on their US tax return; but it seems unclear whether TW-US would be reporting the transfer under FATCA.
With regard to the recipient also, TW-UK doesn’t seem to have quite figured out yet quite how FATCA and CRS affect it.
Nevertheless, it does seem prudent to report the US account to the IRS and file FBAR while in the US. Better safe than sorry.
Or rather, it would seem prudent to report the UK account on the US tax return. (Typo)
@PhyllisH and Denise
I am unsure how TW works, my University TIAcreff pension is transferred once a year from the US to my resident country using a Forex Company however I do need a resident country bank to receive my funds. How does Denise receive her transferred money in the UK without aUK bank account?
It may be that Denise has only transferred money below the $10,000 amount but I agree, if she does move her house sale funds before renouncing then she should file an FBAR.
PS Phyllis
Any foreign transfer from a US bank over $10,000 is reported to the IRS even before FATCA. I was audited back in 1987 when I sent money to my parents account to help pay for care!
Surely it’s better that the transfer does get reported to the IRS by TW – assuming the “virtual” UK account (the receiving account) has been reported by the OP on US tax return and FBAR,
Then the OP can presumably make withdrawals from the “virtual” UK account while renouncing and waiting for UK residence to be established.
Or am I missing something?
@phyllisH
Of course , but we don’t know if she has sent over
$10, 000 in the past, in which case Denise didn’t need to report it on FBAR, and Denise’s question stated she didn’t want to have to send in an FBAR, so the obvious solution would be to wait until she had renounced before sending her house funds to the UK.
@PhyllisH
Maybe you missed my previous post.?! There were 2.
@ Phyllis
Sorry if that came over as abrupt, I had a call in the middle of posting 🙂
I must indeed be missing something, because I can’t see what difference it makes if an FBAR gets filed to report a UK account held by a US citizen while they’re living in the US or in the UK; or doesn’t get filed because the individual has renounced and no longer has an obligation to file FBARS.
However, I agree that waiting till after renunciation will avoid any need to file FBAR for the TW-UK account.
@ Phyllis
Yes, I agree, it doesn’t make much sense but maybe Denise on principle wants to avoid FBAR or even to avoid a large amount FBAR that might trigger an audit if one had never been filed before. I was just pointing out options.
In fact I was in the same position when I decided to retire back home ,I had been filing FBARS but waited until I had renounced before moving my money from the US as I certainly didn’t want to send in a large, last, FBAR.
Thank you Phyllis.
Am I missing something,Has there been a change to the form \ online process? I only see the 4079 form only and no other forms listed for renunciation \ relinquishement. Anyone know if there has been any changes?
It all depends on the embassy you’re planning to use. London has additional forms because you only have one interview with them. One of their questionnaires replaces an initial interview, but some embassies prefer to put people through two interviews.
Where are you planning to renounce?
I checked London and I only see 4079 form and no other forms. I’m looking under U.S. services – renunciation. Renunciation is the only option listed. I’ve checked othe r places in UK and they all say the same thing?!