FATCA and UK Trusts
Produced in partnership with Jason Collins of Pinsent Masons
FATCA and UK Trusts

The following Private Client guidance note Produced in partnership with Jason Collins of Pinsent Masons provides comprehensive and up to date legal information covering:

  • FATCA and UK Trusts
  • What is FATCA and how does it affect UK Trusts?
  • Definitions—US-reporting
  • Classifying trusts and companies
  • Custodial institutions
  • NFFEs
  • Trusts which are Financial Institutions—reporting requirements
  • Reporting routes
  • Financial Accounts
  • Reportable Accounts

This Practice Note considers the application of the Foreign Account Tax Compliance Act (FATCA) to UK Trusts, as implemented in the UK by the International Tax Compliance Regulations 2015, SI 2015/878. For a general overview of FATCA, see Practice Note: FATCA and private client, which contains links to more detailed guidance.

Where the trust is a pension fund, see Practice Note: FATCA in the UK—pension schemes.

What is FATCA and how does it affect UK Trusts?

FATCA is a US law designed to prevent tax evasion by US tax payers using offshore banking facilities . This Practice Note focuses on the implications of FATCA for trusts based in the UK and gives an overview of the key issues. This guide does not apply to offshore trusts.

FATCA requires non-US Financial Institutions to report on Financial Accounts in existence on or after 1 July 2014 which are held by US individuals, certain types of US entities and certain types of non-US entities which have US controlling persons. Non-US Financial Institutions are required to undertake due diligence on their Account Holders, including entity Account Holders such as trusts or companies, to establish whether they are reportable.

It is important to note that UK trusts and managed companies can in some circumstances themselves be classified as UK Financial Institutions and thus have due diligence obligations