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UK Banking for US Citizens




OPENING UP A WORLD OF OPPORTUNITY FOR AMERICAN CITIZENS LIVING IN THE UK

AMERICAN CITIZENS ARE FINDING IT INCREASINGLY HARD TO ACCESS BANKING SERVICES IN THE UK. JOHN STEPEK ASKS WHY.
JUNE 2019


As anyone who’s ever lived abroad for an extended period can attest, opening a bank account can be tricky when you have only a limited local address history and a pocketful of ID issued by a foreign bureaucracy. Yet spare a thought for American expats. You might assume that citizens of the world’s most important economy would find it relatively easy to access banking services in the UK – yet many Americans have found the opposite is the case.

The big issue is regulation. US citizens are taxed on their global earnings, regardless of where they live. In 2010, amid the fallout from the global financial crisis, the US passed the Foreign Account Tax Compliance Act (FATCA), in an effort to raise revenue by cracking down on tax evasion. Among other things, FATCA places an obligation on overseas financial institutions to look out for US clients and to report their assets and identities to the US authorities. The cost of ensuring compliance with FATCA has deterred certain institutions from taking on US clients at all.

Then in 2015, the EU’s Mortgage Credit Directive made it harder for expats to apply for mortgages. While not aimed specifically at US citizens, the directive affects loans taken out in a foreign currency. In this case, even sterling mortgages are classified as being foreign currency mortgages if the holder is not paid in sterling. So if you’re a US expat in the UK being paid in dollars, you have to jump through extra hoops to borrow money to buy a home.

In short, regulation has made it more expensive and riskier to take on US expats as clients. Given that it’s a relatively niche market (estimates from the Office for National Statistics suggest that fewer than 200,000 American citizens live in the UK), many high street banks and larger financial providers don’t see the benefit in taking on the added costs.

Simon Gardiner, one of our Private Bankers, has seen an increase in enquiries from American expats.

‘We recently met with an American client that had moved to the UK with her husband and approached her husband’s bank to open an account for her. They required the client to have a certain “relationship value” before they would agree to look after her, which was not convenient for the client since most of her wealth was managed by her US family office.'

'At Weatherbys we have no requirement for any client to invest with us in order for us to open a bank account.’


'Many of the big players don’t operate in this way leaving the field open to more progressive rivals. Our open-minded approach to taking on clients that are US citizens, non-residents and borrowers aged over 65 has helped us to build valuable relationships over the last few years.’
Simon Gardiner, Private Banker

One client Gardiner has recently assisted is Kara Osborne, 36, who moved from the US to be with her British partner.

‘Weatherbys were absolutely wonderful, walking me through the process of setting up a bank account and explaining how best to move money from the States. We’re looking at buying a property and our initial research suggested it might be difficult to secure a home loan, even though I have a job. However, Weatherbys have been more than happy to engage and find a way to help us to do that.’ The key benefit, says Osborne, has been to reduce the stress involved in adjusting to a major move. ‘Even buying a car; we did a deal late on a Thursday night, called Weatherbys and they took care of transferring the money. I can only say positive things about our experiences with them.’

‘Ultimately, it’s about treating people as individuals,’ says Gardiner. ‘We would no more rule out a client on the basis that they were American, than we would, for example, automatically rule out arranging a mortgage for someone who was 80. We will take a case-by-case view of a client’s circumstances and of their needs.

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To find out more about Weatherbys Private Bank and our services for US Citizens, please contact Simon Gardiner