Your UK Bank Asked If You Are a US Person: What the Letter Means

The letter is a FATCA due-diligence request, not a tax demand. Your UK bank, building society, broker or pension provider is obliged under the UK-US intergovernmental agreement to establish whether you are a US person, and to report the accounts of those who are to HMRC, which passes the data to the IRS. Answering honestly does not create a US tax liability you did not already have - but it does mean the IRS will see the account, so it is worth knowing where you stand before you sign anything.

Key takeaways

• The request flows from the UK-US FATCA agreement signed on 12 September 2012, given domestic effect by the International Tax Compliance Regulations 2015. UK institutions report to HMRC, not directly to the IRS, by 31 May following each calendar year.
• Reported data includes your name, address, taxpayer identification number, account number and year-end balance or value, plus interest, dividends, other income and gross sale proceeds depending on the account type.
• The classic trigger is an unambiguous US place of birth in the provider's records. It can be cured, but only with a specific package of documents.
• If you do not reply, the account can be reported anyway with a missing-TIN code, and HMRC warns that providers "may refuse to open new accounts for you".
• Being an accidental American does not automatically mean you owe US tax - but you may have unfiled returns, FBARs or Forms 8938, and there are published IRS routes back.
• Never sign a self-certification you know to be inaccurate. HMRC can charge a penalty of up to £300 for failing to give correct residence or TIN information where the failure is deliberate or careless.

Why the letter arrived

FATCA - the Foreign Account Tax Compliance Act - was enacted in the United States in 2010. It requires financial institutions worldwide to identify accounts held by US persons and report them, on pain of a 30% withholding tax on their US-source income. Rather than leave its banks to deal with the IRS individually, the UK signed a bilateral agreement on 12 September 2012 and gave it domestic effect through the International Tax Compliance Regulations 2015, in force from 15 April 2015. Under that structure, as HMRC's manual sets out, UK institutions identify and report US accounts to HMRC, and HMRC exchanges the data with the IRS.

So the letter is routine compliance work. It usually arrives for one of three reasons: you opened a new account and no self-certification is on file; a review of existing records has thrown up a US indicator; or the provider already reports you and is chasing a missing US taxpayer identification number.

Timing matters more than people expect. Where a self-certification is needed for a new account and cannot be obtained at opening, HMRC expects it within 90 days - after which the account becomes reportable for that period regardless.

What is actually reported

The letter rarely spells this out. For a reportable account, the information required is:

• your name and address;
• your taxpayer identification number or equivalent;
• the jurisdiction to which the information is reportable;
• the account number, or a functional equivalent;
• the name and identifying number of the reporting financial institution;
• the account balance or value as at the end of the calendar year.

On top of that, a depository account - a current or savings account - reports the gross amount of interest paid or credited during the period. A custodial account - a broker or investment account - reports gross interest, gross dividends, gross other income generated by the assets held, and gross proceeds from the sale or redemption of financial assets.

Note what gross proceeds means in practice. If you sold £60,000 of shares at a loss, the £60,000 is reported, not the loss. The IRS receives a figure that looks like money, not one that looks like profit - which is one reason people are contacted years later about an account that generated no tax at all.

The US indicia that trigger the question

Providers do not guess. They search their electronic records for defined indicators, and HMRC's guidance lists them - one of which is FATCA-only:

• identification of the account holder as a US citizen or resident;
• a current US mailing or residence address;
• a current US telephone number;
• standing instructions to transfer funds to an account maintained in the US;
• a power of attorney or signatory authority granted to a person with a US address;
• an "in-care-of" or "hold mail" address as the only address on file;
• for FATCA only, an unambiguous indication of a US place of birth.

That last one is why so many of these letters land on people who have never lived in the United States. A passport showing a US city as place of birth is enough to start the process, even if the holder left as a baby.

What the letter asks, what it means, what to do

| What the letter asks | What it actually means | What to do |

| --- | --- | --- |

| "Are you a US citizen or US resident for tax purposes?" | A standard self-certification. Your answer decides whether the account is reported to the IRS. | Answer accurately. If you are unsure, establish your status before replying rather than guessing. |

| "Please complete the enclosed self-certification" | No valid certification is on file and the 90-day window is running. | Return it in writing, keep a dated copy and keep proof of submission. |

| "Please complete IRS Form W-9" | The provider believes you are a US person and needs your US TIN. | Form W-9 supplies a TIN for US information reporting. Sign it only if you genuinely are a US person. |

| "Please complete IRS Form W-8BEN" | The provider is treating you as non-US. | Form W-8BEN certifies foreign status. Signing it while you hold US citizenship is a false certification. |

| "Our records show a US place of birth" | The FATCA-only indicium has been found. | It can be cured, but only with the documents below. A bare denial is not enough. |

| "We do not hold a US TIN for you" | An annual TIN solicitation the provider is required to make. | Give your SSN if you have one. If you do not, say so in writing and explain why. |

| "Please respond within 30 / 60 / 90 days" | Reflects the cure and self-certification windows in the rules. | Reply inside the window, even if only to say a full answer is being prepared. |

What a US person actually is

The IRS treats a "United States person" as including a citizen or resident of the United States, a domestic partnership or corporation, and certain estates and trusts. For individuals in the UK, three routes matter.

• Citizenship, including dual nationality and citizenship acquired at birth. US citizens are taxed on worldwide income wherever they live.
• Lawful permanent residence - a green card - which continues to bite until formally abandoned or revoked, not merely when the card expires.
• The substantial presence test. Under the IRS test you are a US resident if present at least 31 days in the current year and 183 days across a three-year weighted count: all days this year, one third of last year's and one sixth of the year before. Exceptions apply for transit, certain commuters, crew and exempt individuals.

Place of birth is not the answer

Being born in the United States usually confers citizenship, but not invariably, and citizenship can have been relinquished. That is why HMRC does not allow a provider simply to take your word for it. To cure an unambiguous US place of birth the provider must obtain all of:

1. a self-certification that you are neither a US citizen nor a US resident for tax purposes;

2. a non-US passport or other government-issued identification evidencing citizenship of another country; and

3. either a Certificate of Loss of Nationality of the United States, or a reasonable explanation of why you do not hold one despite having renounced, or why you did not acquire US citizenship at birth.

"I have never lived there" is not a reasonable explanation. Birth in the US to accredited foreign diplomatic staff might be. If the package cannot be produced, the account stays reportable.

If you do not reply

There is no criminal sanction for ignoring the letter, but the outcome is worse than answering. HMRC's guidance for account holders is blunt: if you do not reply, your provider "could share incorrect information with the relevant tax authority" and "may refuse to open new accounts for you".

The rules also let the provider report the account with your date of birth and a code explaining why no US TIN is held. Under IRS Notice 2024-78, a reporting Model 1 institution seeking that relief must use the IRS codes, contact you by the method most likely in its reasonable judgement to reach you, and include the State Department's joint FATCA FAQs together with the IRS relief procedures for certain former citizens. That is why so many of these letters mention renunciation: it is a condition of the institution's own relief, not a hint about your case.

Whether a provider goes further and restricts or closes a product is a commercial decision governed by your account terms: nothing in the FATCA agreement or the UK regulations requires a UK institution to close an existing account because a self-certification is missing. Silence removes your ability to influence what is reported; it does not stop the reporting.

The honest position for accidental Americans

Here is what the letter will not tell you. It does not create a US tax debt: many people in this position, once the returns are prepared, owe little or nothing, because UK tax on employment income is generally heavier and the foreign earned income exclusion and foreign tax credits relieve most of the rest.

What the letter creates is visibility. Once the account is reported the IRS has your name, TIN status, balance and income figures. Filing obligations sit separately from tax liability, and exposure here attaches to unfiled forms far more than to unpaid tax.

Worked example. Take a UK-resident US citizen with a current account peaking at $14,000 during the calendar year, a savings account at $42,000 and an investment account at $95,000 - $151,000 in aggregate.

• FBAR: required. FinCEN Form 114 is due where the aggregate value of foreign financial accounts exceeds $10,000 at any point in the calendar year. It is due on 15 April with an automatic extension to 15 October.
• Form 8938: not required on these figures. For a single filer living abroad the threshold is more than $200,000 on the last day of the year or more than $300,000 at any time during it. For married filing jointly abroad it is $400,000 and $600,000.
• Form 1040: still required if income exceeds the filing threshold, even where no US tax is due.

The same person living in the United States would cross the Form 8938 threshold at $50,000 on the last day of the year or $75,000 at any time - the thresholds for taxpayers abroad are four times higher. The two forms overlap but are not substitutes: the FBAR goes to FinCEN, Form 8938 is attached to the return, and some accounts are reportable on one but not the other.

The routes back

Two published IRS programmes matter most for people in the UK.

Streamlined Foreign Offshore Procedures. For non-wilful failures, the procedures require that in one or more of the most recent three years for which the return due date has passed you had no US abode and were physically outside the United States for at least 330 full days. You file three years of returns, six years of FBARs, and a signed Form 14653 certifying that the failures were non-wilful. Where the conditions are met, the IRS will not assert failure-to-file, failure-to-pay, accuracy-related, information return or FBAR penalties. The route closes once the IRS has opened a civil examination of your returns for any year. Our streamlined foreign offshore guide walks through the mechanics.

Relief Procedures for Certain Former Citizens. These remain open: the IRS states it is offering them without a specific termination date and will announce a closing date before ending them. They apply only where you relinquished citizenship after 18 March 2010, have net worth of less than $2 million both at expatriation and at the time of submission, have an aggregate tax liability of $25,000 or less for the year of expatriation and the five prior years, have no prior filing history as a US citizen or resident, and the failures were non-wilful. You file six years of returns - the expatriation year plus the five preceding years. Those who qualify are not covered expatriates under section 877A and are not liable for the unpaid tax and penalties for those years.

Note the sequencing trap: these procedures are for people who have already relinquished, not a path you enter while still holding citizenship. If renunciation is under consideration, the tax analysis belongs before the embassy appointment, not after it. More context in our accidental American guide.

SSN, ITIN and the missing-TIN problem

A US taxpayer identification number is the practical bottleneck. If you are a US citizen you need a Social Security number: the IRS is explicit that an ITIN is for people who are not eligible for an SSN, and that US citizens do not need one. A non-citizen spouse or dependant, by contrast, applies for an ITIN on Form W-7.

This matters because returns submitted under the streamlined procedures must carry a valid TIN; without one they will not be processed under those procedures. Someone eligible for an ITIN can submit alongside a complete ITIN application. A citizen cannot, and must obtain an SSN first - through the Social Security Administration, usually via the US embassy, which takes months rather than weeks.

In the meantime, HMRC's guidance on FATCA TINs confirms a missing TIN does not oblige the institution to close the account: it reports your date of birth, uses the appropriate code and makes annual requests for the number. Tell your provider in writing that an SSN application is under way. See our note on getting an SSN or ITIN when you have never filed.

Data protection and what you can ask for

You are entitled to understand what is being said about you. Reasonable requests to make in writing:

• which indicium was found in your records, and where it came from;
• the exact data fields the provider intends to report;
• the first reporting year affected, and whether earlier years have already gone;
• a copy of the self-certification currently held on file for you.

UK data protection law gives you a right of access to your personal data, and the provider's privacy notice should explain the legal basis for sharing it with HMRC - a statutory obligation, not something you can opt out of. What you can do is make sure the data is correct, because the provider's report is what the IRS sees first.

How to respond, step by step

1. Diarise the deadline in the letter and reply within it, even if only to acknowledge and ask for time.

2. Establish your actual status - citizenship, green card, or substantial presence - before you tick any box.

3. Gather the evidence: passports, birth certificate, any Certificate of Loss of Nationality, immigration records, and day counts where presence is in issue.

4. If you are not a US person, assemble the cure package: self-certification, non-US passport, and either a Certificate of Loss of Nationality or a reasonable explanation.

5. If you are a US person, complete the self-certification or Form W-9 accurately, and begin the SSN application at once if you have no number.

6. Establish the filing gap: which years, which forms, and whether any US tax would actually have been payable.

7. Choose a route - streamlined, the former-citizen relief procedures, or ordinary delinquent filing - on the facts, and document why.

8. Reply in writing and keep copies. A verbal confirmation to a call centre leaves you with nothing.

Common mistakes

• Signing a W-8BEN to make the letter go away. Certifying foreign status while holding US citizenship is a false certification, and it is the most damaging single step available at this stage.
• Renouncing first and asking about tax afterwards. Expatriation has its own regime, and the relief procedures carry conditions that are easy to fail by accident.
• Focusing on the return and forgetting the FBAR. The FBAR goes to FinCEN, not with the return, and it is where penalty exposure concentrates. See missed FBARs.
• Quiet disclosure. Filing back returns outside a published programme forfeits the penalty protection those programmes provide.
• Treating ISAs and pensions as invisible. They are UK financial accounts and are reportable like any other; the UK tax wrapper does not cross the Atlantic.
• Letting the 90 days lapse. Once the window closes the account is reportable for that period, and unpicking it afterwards is harder than replying on time.

Sources

• IEIM400040 - Background: FATCA, HMRC
• IEIM402005 - Reportable Information: Introduction, HMRC
• IEIM402045 - Reportable Information: Tax Identification Number FATCA, HMRC
• IEIM402780 - Pre-Existing Individual Accounts: Electronic Records Search, HMRC
• IEIM402880 - Curing US indicia, HMRC
• IEIM403140 - New Individual Accounts: Self Certifications, HMRC
• Automatic Exchange of Information if you have an account, GOV.UK
• How to report Automatic Exchange of Information, GOV.UK
• The International Tax Compliance Regulations 2015 (SI 2015/878), legislation.gov.uk
• UK-US FATCA Agreement, 12 September 2012, US Department of the Treasury
• Classification of taxpayers for US tax purposes, IRS
• Substantial presence test, IRS
• Report of Foreign Bank and Financial Accounts (FBAR), IRS
• Summary of FATCA reporting for US taxpayers, IRS
• Streamlined filing compliance procedures and US taxpayers residing outside the United States, IRS
• Relief procedures for certain former citizens, IRS
• Individual Taxpayer Identification Number, IRS
• Notice 2024-78, IRS

When to get help

Much of this is manageable alone where the facts are simple: one nationality question, a handful of accounts, no complicated income. Get help when the answer is genuinely unclear - a contested place of birth, a green card never formally given up, a company or trust behind the account, or a letter arriving after years of returns you did not know were due. The cheapest version of this problem is the one dealt with before the first report goes out.

If you would like a second pair of eyes, our US-UK expat tax team can map your position, and a licensed CPA or Enrolled Agent reviews and signs off every US filing we prepare. Related reading: catching up on missed US tax returns and our complete guide to US tax compliance for Americans abroad. This article is general information, not advice.