UK Financial Thread (regulation, costs etc)

29th May 2015

UK FATCA

I noticed this nugget summary today regards UK FATCA. Basically it looks like the UK has seen some sense after seeing how FATCA for the USA has alienated the USA businesswise and barred USA citizens from banking in other countries due to the high costs abroad. I expect the plan is to let the USA push the way for reporting abroad and then when (if?) it becomes cost effective, step up reporting to match the USA. At the moment it only effects crown dependencies so in a worst case scenario it might mean residents in the Isle of Man, or somewhere where foriegn customers are more common could find themselves unbanked.

What it basically means is that UK Bitcoin exchanges have choices for residency KYC - :

Quote

FATCA in 2015: Significant deadlines and U.K. FATCA

U.K. FATCA is much less expansive and imposing than its far-reaching U.S. counterpart. It does not seek to extract account-holder information or withholding payments from almost every major financial institution. Only financial institutions (including hedge funds) located in the U.K., its crown dependencies (Guernsey, Jersey, and the Isle of Man), and its overseas territories (among them are the Cayman Islands, B.V.I., Bermuda, and Gibraltar) are subject to U.K. FATCA. Financial institutions do not have to register with Her Majesty’s Revenue & Customs (HMRC) or local tax authorities. U.K. FATCA does not even impose withholding tax on payments to non-compliant account holders.

What U.K. FATCA does require is that financial institutions employ due diligence procedures to identify account holders and investors that are “specified U.K. persons,” which are generally defined as U.K. tax residents. Funds will need to determine whether their investors are specified U.K. persons. Additionally, funds should update their investor intake procedures to include the verification of U.K. tax status for new investors.

Three options are available for funds to identify specified U.K. persons: (a) searching documentation for indicia of U.K. taxpayer status, (b) relying on investor self-certification, and (c) reviewing publicly available information from U.S. FATCA registration (for entities only). To identify U.K. investors via self-certification, funds cannot merely rely on investors’ Forms W-8 or W-9; rather, funds will need to request additional self-certification information. Funds can lay the groundwork in 2015 to be prepared for June 30, 2016, when the first annual reports on U.K. account holders are due.

from http://www.arthurbellcpas.com/article/fatca-2015-significant-deadlines-and-uk-fatca

In general the UK now has a lot of info regards foreign transactions... in theory. They probably always did through spook agencies. It's just now they have info they can use.

Norwich and Peterbough free debit card ATM abroad withdrawn

Still seems to work for card holders. But no new accounts being opened.

Metro ATM free withdrawals reduced to SEPA Zone

It's now SEPA zone only for Metro Bank. To open an account you have to go to London.

SEPA transfers still expensive
The UK still likes to think it's different, charging for SEPA zone transfers. Seems a bit strange. Why the cost? Language barrier? Why is the rest of Europe able to do it but not here? Transferwise and currencyfair offer an alternative. This begs the question... why don't banks cut them out and do it themselves taking the profit? Both TW and CF both are blocked from sending to Bitcoin exchanges. However... there are probably some exchanges they aren't aware of yet as there are so many.

CurrencyFair and Clearing Houses - watch out

If you send a payment with CurrencyFair bear in mind that if you use the cheap option, your name will be stripped from the payment info. This means that due to Know Your Customer (KYC) the receiving bank may withhold your funds. I wonder what the legal aspect of this is. I'm not sure if Transferwise has this problem.

Bitcoin debit cards

Most seem to be available for UK customers. Thankfully FATCA hasn't scared them off. Some banks are lumping in UK customers with USA due to FATCA because they heard UK is FATCA too... and blocking business. Thankfully not here so it seems. Bitstamp isn't a very cheap one... and since you can't interact with them due to bank blocking, not much use.
Cashing out coin is easier in this sense.

Prepaid cards for the unbanked
The homeless etc, still paying massive fees. Kalixa seems to be cheapest. Bitcoin cards not really any better than this for fees.

Getting slightly offtopic
List of UK Bitcoin merchants info thread:
https://bitcointalk.org/index.php?topic=261667.0
UCL seem to still be active with Bitcoin development:
[url]http://www3.imperial.ac.uk/bitcoin/[url]

Please let me know if you have any info people should know and I'll update here