FULL ISA GUIDE (UK) – Save without paying tax is similar to  Canada’s Registered Tax Free Savings Account (TFSA).  Neither come with a warning sticker for investors who may be (or may not be) *US Persons* as to whom and how the US considers the ISA and the TFSA *foreign trusts*.

Both the UK/US Intergovernmental Agreement (IGA) and the Canada/US Intergovernmental Agreement (IGA) set out exemptions for the UK ISA and the Canadian TFSA.

Now, even with the UK IGA exempting the ISA, some investment brokers are refusing to open accounts for British savers who have US citizenship, as a result of draconian laws introduced by US tax authorities.

The legislation, called Foreign Account Tax Compliant Act (or “Fatca”), requires banks, brokers and other finance firms to report the names and financial details of US customers to America’s Internal Revenue Service.

This is costly and some organisations, including National Savings & Investments, have decided not to comply. Instead they have closed the accounts of US nationals, or refused applications for new accounts.

It has emerged that a number of DIY brokers have decided to take similar action, updating their terms and conditions to bar US citizens even if they are British residents and taxpayers.

…“We had not previously requested details regarding client nationalities as prior to last year there was no requirement to do so. When we become aware that a client has US links we explain any decision regarding the closure of the account to the client and what their options are.”

Other brokers to halt the opening of new accounts for US citizens include Interactive Investor, the Share Centre and Alliance Trust Savings.

The Share Centre’s current terms and conditions state: “In the future, should you become an American citizen, you agree to inform us immediately and consent to the automatic closure of your account.”

**********

Which other countries will follow suit / copy cat to protect themselves, even for such accounts *IGA exempted from FATCA reporting*?

A good friend of mine, a Canadian citizen who has lived in Canada for 40 years, recently shared some of her thoughts with me regarding what she describes as a sort of cognitive dissonance in terms of her changing feelings towards the country she was born in, grew up in, and is still a citizen of – the USA. The following is narrated from some emails she sent me, and for which she gave permission to share with the Brock community. She says:

I needed a break from all this FATCA craziness, so went to a show called “Rock ‘n Roll Legends”, at a local theater with my neighbours. Although the theater is small, it is a class act and people come from all over to watch the shows. I expected to have trouble staying in my seat and figured I would want to dance up and down the aisles. And it was just fabulous! They did this retrospective of showing US news on the screen while performing the music that was current at the time from the 60′ and 70’s. The cast was amazing. They had the music just absolutely perfectly dead on, all could sing unbelievably well, mimicking the original artists perfectly, and each played multiple instruments.

It was unreal. But the most unpredictable thing happened to me. Instead of wanting to dance in the aisles, I ended up sobbing. You didn’t grow up in the USA, and are much younger than me. I lived through Viet Nam and lost classmates. I lived through the atrocities committed, and yet I loved my country – not the government but the nation. I loved my classmates that died in Nam, understood that: only the poor kids were sent to fight and were not honoured upon their return;  the politicians’ kids didn’t go; and the country didn’t care about the expendable poor kids but just used them for political fodder.

In a strange way that whole era, combined in my head at the same time with this FATCA mess we are currently in, and I had this soul wrenching, demoralizing sense of utter betrayal and complete understanding of what a fool I have been for so many years. I just sobbed. They showed pictures from Viet Nam – the young soldiers, the devastation – all to the backdrop of “He ain’t heavy he’s my brother”. It just killed me.

To actually have believed that the country was good, but to now understand that the government has always been and always will be just simply cruel, makes me ashamed to have this red, white and blue tattoo, just simply ashamed. Yet it is who I am. At a gut level I think I actually see myself as an American living in Canada. But now I am left with this empty, groundless, terrifying feeling. I cannot shed this ‘American thing’ that is me, nor am I really Canadian (aside from living here for 40 years and having a Canadian passport).

In the grand scale of life does it really matter? We are all citizens of this planet. Maybe having what one calls a ‘national identity’ is just simply foolish, and an ego thing. Intellectually, I believe this but in my gut I am simply sick, sad and very, very unhappy. It is a sense of being adrift, beyond lonely, of not having one drop of solid ground under my feet, having no identity, and of being terrified of and hurt by my once beloved country.

Am I making one drop of sense? I really can’t describe the source of my tears nor the pain in my tummy. Betrayal? Fear? Being adrift? Am I overreacting? Maybe being involved with this fight day in and day out is causing me to flip out. But it is real, and not dealing with it, not fighting back will do nothing to make it go away. I have to stay involved. Taking a break will just cause me more anxiety.

Well, so much for it being a fun night. I now feel hung over and exhausted, and I didn’t drink a thing! My head is stuck in a depressive bubble.

TORONTO
Sunday
May 31,2015
12 noon – 2 p.m.
$20.00
Carr Hall
100 St. Joseph St.
Toronto ON M5S 2C4
MAP
 
The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.

We have recently learned that no Canadians have yet been reported by the CRA to the IRS. This will not occur prior to September 15 and is required by September 30, 2015. You may wish to keep track of a suit trying to prevent this information from leaving Canada
www.adcs-adsc.ca
 
WHO: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
Citizenshipsolutions.ca

ADMISSION: $20 per individual or $40 for a family up to four. Payable in cash at the door.
 
Hope to see you, your families and friends! Spread the word!
 
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.
 

We hear the word ‘narcissist’ a lot these days in articles and media. It has become a popular buzzword used to describe manipulative, controlling people who have an inflated sense of their own importance, a deep need for admiration, a sense of entitlement, and a lack of empathy for others.  According to psychcentral.com, in order for a person to be diagnosed with narcissistic personality disorder (NPD) they must have five or more of the following  symptoms:

• Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)
• Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love
• Believes that he or she is “special” and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
• Requires excessive admiration
• Has a very strong sense of entitlement, e.g., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations
• Is exploitative of others, e.g., takes advantage of others to achieve his or her own ends
• Lacks empathy, e.g., is unwilling to recognize or identify with the feelings and needs of others
• Is often envious of others or believes that others are envious of him or her
• Regularly shows arrogant, haughty behaviors or attitudes

Most experts agree that narcissism exists on a continuum, with some people naturally being more narcissistic than others, such that the defining line between who has a full blown narcissistic personality disorder (NPD) versus who exhibits highly narcissistic traits is not distinct.  Essentially, to some degree, all of us have behaved narcissistically at one point or another.  Regardless whether we are dealing with full blown NPD or a highly narcissistic person, such individuals can cause a lot of pain and chaos in the lives of those they cross paths with.

 Psychologists and therapists say, watch out if you suspect you are dealing with a highly narcissistic person as their personality is typically fixed, and no amount of pleading, explaining or appealing to their non-existent empathy will change their behaviour unless something is in it for them.  Your best bet is to run far away and never look back if you can. If you are forced to deal with them on a regular basis, for example if such a person is your boss or your parent or your spouse, there are ways to make life less chaotic in terms of how you relate to them, but never forget that they are who they are, and will always be who they are.

Is the USA behaving like a narcissist with regards to its ‘US persons’ living outside USA?

Is USA’s insistence on unique to the world, citizenship based taxation (Eritrea doesn’t count), indicative of a grandiose sense of self-importance?

Is USA preoccupied with fantasies of unlimited success, power, brilliance, and does it believe it is ‘special’ and unique, to the degree that it can justify taxation on people who neither live nor work within the geographical boundaries of the United States of America?

Does the USA require excessive admiration by insisting that people who have lived entire lives outside the USA pay tribute to the USA in the form of taxation and the revealing of their so-called ‘foreign’ bank accounts, simply because they were born on ‘special’ US soil?

Does the USA reveal a strong sense of entitlement by insisting that all other countries in the world, at their own expense, hunt down their own citizens living in their own countries, just because USA says these people are its ‘US persons’?

Is the USA being exploitative of other countries by threatening them with economic sanctions if they do not hand over their US born citizens (and other ‘US persons’ as defined by the USA) to the USA?

Does the USA lack empathy for those it deems ‘US persons’ who are typically citizens of other countries living in those other countries, paying taxes already in those other countries, and who cannot live normal financial lives, cannot save adequately for retirement, and are burdened by having to marry two incompatible tax systems?

Does the USA show arrogant, haughty behaviour or attitude by presuming it is OK for it to be the ONLY country in the world(Eritrea doesn’t count) to impose citizenship based taxation, knowing full well that if ALL countries did this, the world would be a financial mess?

Even if FATCA and CBT are struck down, is it safe to remain a ‘US person’ living outside USA, or is your best bet to run to the nearest US consulate and renounce US citizenship to get the narcissist out of your life forever?

While waiting around for the Cavaliers Hawks game to begin I came across this!

http://www.moodystax.com/downloads/Renouncing-Part2-Appendix.pdf

From this:

http://www.moodysgartner.com/renouncing-your-us-citizenship-new-law-may-keep-you-out-forever/

Psychologists describe 5 stages of grief based on the Kubler-Ross model introduced by Swiss psychiatrist Elisabeth Kübler-Ross in her 1969 book, ‘On Death and Dying’.  Although originally ascribed to the emotional stages experienced due to death of a loved one, the model can also be useful to understand the responses to any subjective trauma that a person may go through, for example a relationship breakup, a job loss, or a ‘OMG! I am a US taxpayer’ moment.

The key here is ‘subjective trauma’.  Many ‘US persons’ know what it is like to have people roll their eyes, yawn, or wonder why we are so worked up, just because we discover we are subject to FATCA (what’s the big deal? You ARE an American!), or because we discover we are US taxpayers (if you don’t like it why don’t you renounce?).  Typically, we do not get the sympathy one would get if we had a serious illness, or lost our job, or divorced our spouse.

Non-US persons for the most part, just do not ‘get’ the ‘US person’ curse, because to be FATCA’d and CBT’d is not within the realm of normal human experiences. We are unique and special in the world that way – thanks to USA’s exceptional treatment of those it deems ‘US persons’. Nevertheless it IS traumatic for those of us who have lived most or all our lives in countries other than the USA, and who have never had a clue we were US taxpayers on our non-US income, to be FATCA’d and CBT’d.

The following are the 5 stages of grief as outlined in the Kubler-Ross model. Keep in mind that these stages are not necessarily linear. One day you may feel like you are angry beyond belief, and the next day you may feel that it just is what it is. Hopefully, at some point, most of your days will fall into the latter category.

Denial.

The first reaction to hearing one has a terminal illness, or their house burned down, or they are subject to the tax laws of a foreign country, is denial. This just CANNOT be for real. It makes no sense. This has got to be wrong. How could I have lived all these years and NOT known I was a US taxpayer? There must be exceptions for people like me who don’t live in the USA. They surely cannot be referring to ME.

Anger.

Once the initial shock wears off, anger follows. We want to blame someone or something. We may be angry at the doctor who gives us a bad diagnosis, at the driver who caused the accident, or at ourselves for not doing something to prevent whatever bad thing happened. We are angry at the Canadian government for not standing up for us, at our spouse who thinks we are over reacting, at our neighbour who doesn’t want to listen to our rants, at ourselves for not figuring out years ago that we were US taxpayers, or at the American government for acting like it owns us.

Bargaining.

This is the stage where we play games with ourselves, and with others, desperately trying to ‘work it out’ or ‘fix things’, so that we can go back to the way things were before. The person whose romantic relationship is at an end may promise to change their behaviour – anything to not have the relationship end. The dying patient may promise God he/she will be a better person or take better care of himself/herself – anything to not have to die. The newly aware US taxpayer searches for a way to work out their non-compliance: streamlined program? 5 years tax compliance catch-up? – just please don’t penalize me for my ignorance.

Depression.

Reality is setting in now. There is no easy way out. We are not going to bring our loved one back. Our job is gone forever. The relationship is definitely over. No matter which route we take to solving our ‘US taxpayer status’ we are going to pay – whether that be in taxes, compliance fees, penalties, loss of privacy, loss of US citizenship, or by being forced into hiding. It sucks no matter how you look at it, and this just makes us sad.  🙁

Acceptance.

Psychologists and grief counsellors say you are lucky if you get to this point. Many people get stuck in anger or depression for years or even a lifetime – the widower who becomes a recluse when his wife passes away, the mother who mourns a lifetime for the child she lost, the aspiring athlete who never made it to the big leagues and seems forever lost in his former glory years, the ‘hidden’ US person who cannot shake the mental chains of his unwanted ‘US taxpayer status’ even if he has logistically found a way to deal with it. The luckier people at some point accept the reality of what has happened and find a place to put it so that it does not interfere in their daily lives anymore. The widower finds peacefulness alone, or maybe finds new love. The mom, whose child is gone, remembers the happy times she spent with him/her and stops dwelling on what was lost. The US person, finds a way to deal with his/her own particular situation – stays hidden, or becomes tax compliant, or renounces – and moves on with his/her life.