The following Tax guidance note provides comprehensive and up to date legal information covering:
This Practice Note provides a broad overview of the application of Foreign Account Tax Compliance Act (FATCA) to employee incentive arrangements in the UK.
After a brief outline of the general background to FATCA, this Practice Note considers:
how FATCA can affect UK employee incentive arrangements, and
some of the practical issues to be considered when preparing documentation relating to employee incentive arrangements
FATCA is so called because it derives from the Foreign Account Tax Compliance provisions contained in the United States Hiring Incentives to Restore Employment (HIRE) Act 2010.
The main FATCA provisions are now contained in Chapter 4 of Subtitle A of the US Internal Revenue Code (the Code).
The aim of FATCA is, broadly, to deter and reduce tax evasion by US taxpayers using foreign (ie non-US) accounts to hide income and assets from the Internal Revenue Service (IRS).
Broadly, FATCA requires financial institutions (FIs) outside the US (foreign financial institutions) to report to the IRS information on their US account holders.
If the FI fails to comply with the FATCA reporting requirements, it can, depending on the jurisdiction in which it is resident, be subjected to a 30% US withholding tax on certain US source withholdable income (not just the US source income attributable to its US account holders).
For a general summary of FATCA in US law, see
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234