Following recent reports in these pages on the Foreign Account Tax Compliant Act (or “Fatca”), an American citizen, who is also a British resident, contacted us to complain that he was turned away when trying to opening a Post Office Isa.
It emerged that well in advance of Fatca applying in Britain the Post Office introduced terms barring US citizens from opening Isas. HMRC rules make Isas available to all UK residents, regardless of citizenship.
Among those who would not have been able to take out a Cash Isa with the Post Office is Boris Johnson, the Mayor of London, who was born in New York and holds a US passport.
This is costly, which is why some organisations, including National Savings & Investments, have decided not to comply and have instead closed the accounts of US nationals.
Other innocent Britons are also caught up if they own trusts, for instance. It appears the Post Office was adopting this approach – even though Isas should not fall under Fatca’s reach.
Following our questions the Post Office has changed its stance.
It said it had “decided at first to be cautious” but would now “allow US citizens to apply”. It added: “We would like to apologise to any customers with dual citizenship who have been unable to open a Premier Cash Isa at the Post Office.”
Several other banks said American citizens living in Britain had always been able to open Isas.
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