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I applied for a Halifax "Help to Buy" ISA (UK Government scheme). I was born in the USA (but have not been a resident since I was 4 years old, now 26 and my parents are British) so I entered that was my country of birth. It suggested I entered my TIN number (first time I heard about this number), but did not seem to require it and let me proceed without specifying.

Should I be concerned about the US Government trying to claw away some of my money? I've been considering renouncing my Citizenship as they seem to have horrible tax laws for non-residents. But then again I would like to apply for jobs in the USA in the next few years.

Need I worry? Thanks for any help :)

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    Google "mayor of London IRS" for relevant information...
    – DJohnM
    Commented Dec 5, 2015 at 18:04

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IANAL, I am married to someone in your situation.

As a US citizen age 26 who has not had any contact with the IRS, you should most definitely be worried...

As a US citizen, you are (and always have been) required to file a US tax return and pay any tax on all income, no matter where earned, and no matter where you reside. There are often (but not always) agreements between governments to reduce double taxation. The US rule as to whether a particular type of income is taxable will prevail.

As a US citizen with financial accounts (chequing, saving, investment, etc.) above a minimum balance, abroad, you are required to report information, including the amounts in the account, to the US government annually (Look up FBAR). Failure to file these forms carries harsh penalties.

A recent law (FATCA) requires foreign financial institutions to report information on their US citizen clients to the US, irrespective of any local banking privacy laws. It's possible that your application triggered these reporting requirements.

You will not be allowed to renounce your US citizenship until you have paid all past US taxes and penalties.

Good new: you are eligible in ten years or so to run for President.

Don't believe any of this, or that nothing has been missed; you must consult with a local tax expert specializing in US/UK tax laws.

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    It's not quite that bad. You must file in almost all cases. If living abroad as OP is, you can exclude earned income up to a limit currently about USD100k. On other income with rare exceptions you should only need to pay US tax that exceeds foreign tax. FBAR&FATCA are the real dangers: if you report there is no tax just for having accounts/assets, but if you don't report there is penalty as you say. Note FBAR goes to FinCen not IRS and is on a different schedule.
    – dave_thompson_085
    Commented Dec 6, 2015 at 8:55
  • Yikes, well thanks for the honest answer. So far I have only ever once worked a full year full-time (eternal student) and have less than £10,000 in savings so I'm probably not going to get hit too hard if at all. But I guess I better start doing my reading. Thanks.
    – Tom
    Commented Dec 6, 2015 at 12:31
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    From what @dave_thompson_085 says the only thing I'm currently in danger of is my "help to buy" ISA because that's completely tax free, so the will automatically exceed US tax so they will try to tax my ISA?
    – Tom
    Commented Dec 6, 2015 at 12:36
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    @Tom very possible. This is one of the pains with tax-sheltered accounts (like retirement accounts, etc) for dual citizens, especially US dual citizens.
    – Yosef Weiner
    Commented Dec 6, 2015 at 14:16

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