In this month’s episode of US-UK Tax Talk, Aidan Grant is joined by Simon Gardiner, Senior Private Banker at Weatherbys, to discuss why Americans can find banking in the UK difficult—and how a relationship-led approach can help.

Aidan and Simon explore why establishing a UK banking relationship can be valuable for Americans moving to, working in or spending significant time in the UK. They discuss currency exposure, overseas transaction fees, building a UK financial footprint and the practical difficulties people encounter when they do not yet have a UK address.

The conversation also covers bank due diligence, source-of-funds checks, FATCA and the Common Reporting Standard. Simon explains why US citizenship can create additional reporting requirements for financial institutions, and why that does not necessarily mean Americans are unable to access banking services in the UK.

Finally, Aidan and Simon discuss mortgages for clients with overseas income and assets, the advantages and risks of sterling and US-dollar borrowing, and Lombard lending against an investment portfolio.

Join us on the first Wednesday of every month for a new episode of the US-UK Tax Talk podcast, brought to you by Collyer Bristow. Watch recent episodes on Collyer Bristow’s YouTube channel, and connect with our team for further insights.

Key Takeaways

Why might an American need a UK bank account?

A UK account can make day-to-day spending in pounds more convenient, reduce exposure to foreign-currency transaction fees and help establish a local financial footprint. It can also be useful when arranging services such as a mobile phone, renting a property or applying for borrowing.

Can someone open a UK bank account before moving to the UK?

Potentially, yes. A bank may be able to verify an applicant’s existing overseas address and begin the relationship before they have a UK address, provided it can obtain the required identification and due-diligence information.

Why do banks ask so many questions about wealth and source of funds?

Banks need to understand who their clients are, where their wealth has come from and the expected movement of funds through an account. Strong records help banks meet their regulatory obligations and can reduce the risk of delays or queries when significant payments arrive.

What is FATCA?

The Foreign Account Tax Compliance Act, or FATCA, is a US reporting regime. It requires many non-US financial institutions to identify and report information about accounts held by US-connected clients. This can create an additional compliance burden for UK banks.

What is the Common Reporting Standard?

The Common Reporting Standard, or CRS, is an international system for the automatic exchange of financial-account information between tax authorities. Banks collect information about clients’ tax residence so that the relevant reporting can take place.

Why can FATCA make banking harder for Americans?

FATCA reporting is separate from CRS and applies based on US citizenship and other US connections. Some institutions may find the extra systems and administration burdensome, particularly where they do not have many US-connected clients.

Do Americans need to move their investments to a UK bank?

Not necessarily. Some clients may wish to retain long-standing US investment arrangements, including pensions and investment accounts, while establishing a UK banking relationship for current accounts, savings, foreign exchange or lending. Clients should obtain tax advice before moving assets.

What is Lombard lending?

Lombard lending is borrowing secured against an investment portfolio. It can provide access to liquidity without selling investments immediately and may be helpful for short-term funding needs, although the suitability and risks depend on the individual circumstances.

Why can a UK mortgage be difficult for a recent arrival from the US?

A person who has just arrived may not yet have a UK address, UK income, local assets or a domestic credit history. Private banks can sometimes take a broader view of overseas assets, income and a client’s overall ability to service and repay borrowing.

Should an American borrow in sterling or US dollars?

This depends on the client’s income, assets, intended repayment source and tax position. Sterling borrowing may align with the value of a UK property, while dollar borrowing may suit a client with predominantly dollar income or assets. Both approaches involve different currency and loan-to-value considerations.

When should someone seek advice?

Advice should be obtained before relocating, opening accounts, moving assets or entering into significant borrowing arrangements. Early planning can help ensure banking, tax and legal considerations are addressed together.