FATCA in the UK—securitisation vehicles
Produced in partnership with White & Case

The following Tax practice note produced in partnership with White & Case provides comprehensive and up to date legal information covering:

  • FATCA in the UK—securitisation vehicles
  • Background to FATCA
  • Outline of a standard securitisation structure
  • FATCA implications for securitisation vehicles
  • Status as FFIs or deemed-compliant FFIs
  • Intergovernmental agreements
  • Expanded affiliated groups
  • Related Entities exemption
  • Application of EAGs to securitisation companies
  • Grandfathered obligations and FATCA withholding on payments to investors
  • More...

FATCA in the UK—securitisation vehicles

Background to FATCA

FATCA is so-called because it derives from the Foreign Account Tax Compliance provisions in Subtitle A of Title V (offset Provisions) of the United States Hiring Incentives to Restore Employment Act 2010 (the HIRE Act).

The main FATCA provisions are contained in Chapter 4 of Subtitle A of the US Internal Revenue Code of 1986, as amended (the Code) and supplemented by the Final Regulations, TD 9610, TD 9657, TD 9809 (regulations relating to information reporting by foreign financial institutions and withholding on certain payments to foreign financial institutions and other foreign entities) and REG-132881-17 (proposed US Treasury regulations, which may be relied upon pending finalization, relating to the elimination and deferral of certain categories of FATCA withholding) (the US FATCA Regulations).

The aim of FATCA is 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 (the IRS).

Broadly, FATCA requires financial institutions (FIs) (as defined by FATCA) outside the US (ie foreign financial institutions (FFIs)) to report information on their US account holders to the IRS.

If the financial institution 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 income (not just the US

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