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Old 30.03.2011, 10:10
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Opening a Mortgage account with UBS - US Citizen disclosure papers?

Hi,

I have a question about opening an account with UBS - we are in the middle of opening one for our mortgage account and in the middle of all the papers we were signing there was a paper that we are supposed to sign stating that each of us is not an american citizen or a resident of the USA.

I signed because I am definitely not a citizen or resident, but my husband holds dual citizenship, although he has never lived or worked in the states before and we were a bit dubious about signing the paper without knowing what it was for. I don't want the US government to suddenly demand he pays taxes or something in the states just because he is a citizen even though he has never worked there before...or something like that.. would like to know what the paper is for...does the US have a disclosure agreement about US citizens with UBS or something???

Anyone know anything about this??? Thanks for any help!
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Old 30.03.2011, 10:36
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

UBS will not let you open a bank account (or, I assume, a mortgage account) [at your local branch] if you are a US citizen/green card holder.

The advice I was given was to shop around a bit - try one of the smaller cantonal banks or credit unions - no idea if their mortgage rates will be competitive for you though.

Last edited by MathNut; 30.03.2011 at 10:44. Reason: clarified: you can still open a UBS account but it has to go through the special branch in Zurich
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Old 30.03.2011, 10:42
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

Sorry to say, but if he is an american citizen he should be paying US taxes.

On the issue of the paper, this is something fairly recent that UBS implemented around the time of the big IRS/UBS legal battle. Basically now UBS segregates all US clients into certain branches/offices so that they are handled differently than other clients. If resident here, basically there should be no issues, but if you in future take up residence elsewhere, this may require you to sell your house/mortgage. Having a foreign bank account likely requires the filing of the FBAR form by the US citizen, and as of 2012 (I believe) the new FATCA legislation comes into force, making the already onerous FBAR look like child's play. I believe, with the implementaion of new FATCA, although all final rules not yet formalised, all foreign banks with US clients will have to report to the IRS.
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Old 30.03.2011, 10:46
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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UBS will not let you open a bank account (or, I assume, a mortgage account) [at your local branch] if you are a US citizen/green card holder.
Sorry, but I would have to disagree. If you are a legal resident here, you can open a bank account. However, what they are increasingly verifying is if you actually live here, as a lot of US residents have and continue to try to open accounts from abroad, which is now a major issue given the UBS-IRS legal case.
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Old 30.03.2011, 10:51
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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Sorry to say, but if he is an american citizen he should be paying US taxes.
Are you sure???? That doesnt make any sense if he has never worked or lived there or earnt any money through their system! Why should they have the right to demand taxes from him when he has never contributed or taken anything from their system???? Anyone else know for sure whether this is the case or not????
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Old 30.03.2011, 10:59
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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... Why should they have the right to demand taxes from him when he has never contributed or taken anything from their system?...
The US government has decided to tax their citizens for worldwide income, no matter where they live. If he doesn't wish to be part of this, he just has to renounce his citizenship.

Whether this is morally right or not is a different question. Presumably, he can vote if he wants to, so he is liable for tax.
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Old 30.03.2011, 11:06
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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Whether this is morally right or not is a different question. Presumably, he can vote if he wants to, so he is liable for tax.
I agree it is a different question all together, however, forgive me for disagreeing with the second part of your statement.

Taxes are typically paid for services provided by the government (ie - sanitation, water, property, police/fire, schools, roads, etc). As he would derive no benefit from the system, while living here, why should he be required to pay taxes?

I apologize if that comes off as rude.
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Old 30.03.2011, 11:08
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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Sorry, but I would have to disagree. If you are a legal resident here, you can open a bank account. However, what they are increasingly verifying is if you actually live here, as a lot of US residents have and continue to try to open accounts from abroad, which is now a major issue given the UBS-IRS legal case.
Yes, but not at your local branch (see my edit) - it has to be done through a particular branch in Zürich that handles US-citizen clients.

We wanted a joint account once we got married but hubby's UBS branch told us they couldn't do it. We would have had to go up to Zurich and apply all over again, at the branch there that deals with US citizens... and that would have meant taking another afternoon off work... plus do all our banking in future at that branch... end result, we didn't bother.

Now we've moved to another canton, we may look into the joint-account thing again with our new cantonal bank - or we may leave things as they are. Seems to work OK.
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Old 30.03.2011, 11:15
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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Taxes are typically paid for services provided by the government (ie - sanitation, water, property, police/fire, schools, roads, etc). As he would derive no benefit from the system, while living here, why should he be required to pay taxes?
Try telling the IRS this and see how far you get...interest and penalities to top it off I'm afraid.

On a more serious note, this has been beaten to death here on the EF and countless other expat forums, but until the US changes the law, all US citizens are subject to taxation regardless of residence.
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Old 30.03.2011, 11:16
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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Anyone else know for sure whether this is the case or not????
Doubtful that he will have to give up his dual citizenship. There is a residency test which determines your tax liability in a current year.

http://www.irs.gov/businesses/small/...=97245,00.html

Your can either give up your citizenship, OR you can meet the residency requirement.
If you live here for 12 consecutive months, you are entitled to an exemption, which I believe is 90/95K (single, I'm not sure if its different for married couples). Any amount over this, you are required to pay taxes on. If during that year you live in a foreign country for less that 12 consecutive months, then you must pay taxes on your income as if you are in the US.

Again, I'm not 100% as I haven't really read up on it since December. Perhaps someone who has lived here longer than me can clarify. Hope that helps.
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Old 30.03.2011, 11:18
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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On a more serious note, this has been beaten to death here on the EF and countless other expat forums, but until the US changes the law, all US citizens are subject to taxation regardless of residence.
What about residency for tax purposes? There is an exemption no?
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Old 30.03.2011, 11:21
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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We wanted a joint account once we got married but hubby's UBS branch told us they couldn't do it. We would have had to go up to Zurich and apply all over again, at the branch there that deals with US citizens... and that would have meant taking another afternoon off work... plus do all our banking in future at that branch... end result, we didn't bother.
Sorry, posted before your edit, but as said in first post, yes they segregate US clients to certain offices, etc. But in my experience, this has never been a problem in either opening an account nor in conducting business at a branch office. Once you have an account open, have dones all regular banking through local branch office and the hundreds of ATMs or on-line banking.
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Old 30.03.2011, 11:26
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

As this discussion is about me I will just jump in. I hold both the Swiss and the American citizenship. My mother who is American has been living here for 35+ years and doesn't pay taxes (except property tax for the property she owns) in the states either. I have never lived there, worked there etc. I am a US citizen by decent - which means my children aren't US citizens anymore. So the only tie to the US is my passport - which comes out of my safe every time I have to renew it or when I travel to the US which has been once in the last 15 years. I could vote - but I don't because to be honest I have no idea how the American political system works.
That doesn't constitute many ties to the US in my opinion. If anything has changed about taxation in the last 35 years then I have not officially been informed. And as long as I don't get an official letter I'm pretty sure I will not be doing anything about it. I agree that I shouldn't have to pay taxes if I never am a beneficiary of anything those taxes pay for.

As my family has been a very good customer of the UBS since before it was the UBS we get really good rates and I would like to benefit from them. We only deal with the Zurich Headquarter anyways so I don't care about local branches and hope they would be able to figure this thing out.
What I don't agree with is that the UBS should be allowed to tell the IRS about my accounts or mortgages. I'm still waiting to hear back from my banker about the whole thing.
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Old 30.03.2011, 11:36
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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As this discussion is about me I will just jump in. I hold both the Swiss and the American citizenship. My mother who is American has been living here for 35+ years and doesn't pay taxes (except property tax for the property she owns) in the states either. I have never lived there, worked there etc. I am a US citizen by decent - which means my children aren't US citizens anymore. So the only tie to the US is my passport - which comes out of my safe every time I have to renew it or when I travel to the US which has been once in the last 15 years. I could vote - but I don't because to be honest I have no idea how the American political system works.
That doesn't constitute many ties to the US in my opinion. If anything has changed about taxation in the last 35 years then I have not officially been informed. And as long as I don't get an official letter I'm pretty sure I will not be doing anything about it. I agree that I shouldn't have to pay taxes if I never am a beneficiary of anything those taxes pay for.

As my family has been a very good customer of the UBS since before it was the UBS we get really good rates and I would like to benefit from them. We only deal with the Zurich Headquarter anyways so I don't care about local branches and hope they would be able to figure this thing out.
What I don't agree with is that the UBS should be allowed to tell the IRS about my accounts or mortgages. I'm still waiting to hear back from my banker about the whole thing.
If you are US citizen, or married to one, you are legally required to file a tax return with the IRS on your world-wide income (whether you've ever lived or worked there, or not). No question. Search this forum or google it in general.

All the "but whys" in the world won't change this fact. If you are a US citizen and haven't been filing tax returns I would do something about it. The repercussions won't be fun.

I've heard stories of French/US dual citizens, who have never lived in the US, whose wife inherited money from her granmother's estate (in France), and the couple had to pay tax on it in the US because of her husband's US citizenship.

As was previously said, the only way to avoid it is to give up your US citizenship. My kids were born outside the US but have inherited US citizenship and I will encourage them to give it up before they turn 18 should it turn out they will probably never live there. It will be a lifelong drag for them, and any future spouses, should they keep it and never actually live or work there.

Regarding getting a UBS mortgage, yes this is possible but it really depends on your specific branch and even your specific client manager. They have dedicated client managers for US citizens. I would still shop around and then negotiate the terms with your UBS client manager (including the interest rate and other fees...it's all open for negotiation).

And I wouldn't encourage you to sign a form to say you are not a US citizen or greencard holder, if in fact you are. Regardless if you have ever lived and worked there.
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Old 30.03.2011, 11:47
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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If you are US citizen, or married to one, you are legally required to file a tax return with the IRS on your world-wide income (whether you've ever lived or worked there, or not). No question. Search this forum or google it in general.
So he needs to file a return, fair enough. But he doesn't have to give up his dual citizenship. The other option is the residency test, which at the very least would minimize any tax liability (assuming there is one).



Personal question if you don't mind. Your children, at 18 years old, certainly wouldn't have any tax liability. Why would you suggest they renounce their citizenship? Is it based on principle? (which I can appreciate). Just curious.
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Old 30.03.2011, 11:49
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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What about residency for tax purposes? There is an exemption no?
Not sure what you are bringing to this thread. If a US citizen, you are subject to US tax irrespective of your residence.

When filing, etc. the tax code and sometimes bilatalteral tax agreements give certain advantages or lessen the tax burden depending on the circumstances. Indeed there is the foreign earned income exclusion, but you would need to qualify in the first place and earn less than the cap. In a lot of instances, just because of falling through the cracks, US citizens living abroad often do owe a signifiant sum to the IRS.
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Old 30.03.2011, 11:49
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

Wouldn't it be possible to have your name different on US and non US passport (for dual passport holders), so theoretically you are two different people, so no problems with IRS?
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Old 30.03.2011, 11:55
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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All the "but whys" in the world won't change this fact. If you are a US citizen and haven't been filing tax returns I would do something about it. The repercussions won't be fun.
What repercussions? An IRS agent showing up at my door with a tax bill?
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Old 30.03.2011, 11:59
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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That doesn't constitute many ties to the US in my opinion. If anything has changed about taxation in the last 35 years then I have not officially been informed. And as long as I don't get an official letter I'm pretty sure I will not be doing anything about it. I agree that I shouldn't have to pay taxes if I never am a beneficiary of anything those taxes pay for.

As my family has been a very good customer of the UBS since before it was the UBS we get really good rates and I would like to benefit from them. We only deal with the Zurich Headquarter anyways so I don't care about local branches and hope they would be able to figure this thing out.
What I don't agree with is that the UBS should be allowed to tell the IRS about my accounts or mortgages. I'm still waiting to hear back from my banker about the whole thing.
First, totally agree with Mel, irrespective of what you think your ties are, you are subject to filing US tax if you hold the passport.

As said, opening and having a UBS account or mortgage while living here and being a US citizen is no crime. You can do this, but they would need to flag you as a US citizen customer. And due to the new FATCA legislation, already passed but not yet implemented yet, it would seem very likely that UBS will have to report you to the IRS as of 2012/3. Something indeed to verify with your banker. Unfortuately the law was passed to catch people like you who have never filed/paid US tax and live abroad, and presumably, in the eyes of the IRS, are hiding assets from the IRS.
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Old 30.03.2011, 12:00
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Re: Opening a Mortgage account with UBS - US Citizen disclosure papers?

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What repercussions? An IRS agent showing up at my door with a tax bill?
Even worse, google the penalities for not filing the FBAR. If you are lucky there will be another amnesty for the FBAR, if not, I'd be a bit worried.
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