FATCA and private client

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • FATCA and private client
  • What is FATCA?
  • Foreign financial institutions (FFIs)
  • Non-financial foreign entities (NFFEs)
  • UK Trusts
  • Intergovernmental agreements (IGAs)
  • International Tax Compliance Regulations 2015
  • Changes from 20 November 2015
  • Changes from 30 September 2016 (client notification obligations)
  • Changes from 17 May 2017
  • More...

FATCA and private client

This Practice Note provides an introduction to the Foreign Account Tax Compliance Act (FATCA) for private client practitioners and contains links to more detailed guidance.

Although they are separate regimes, the Common Standard on Reporting and Due Diligence for Financial Account Information (CRS) and FATCA share some characteristics: both regimes involve the automatic exchange of information on financial accounts in order to combat cross-border tax avoidance and evasion. In the UK, obligations under the CRS and FATCA are all contained in the International Tax Compliance Regulations 2015, SI 2015/878 (as amended), to minimise the administrative burdens on financial institutions subject to them.

The CRS is outside the scope of this Practice Note. For further details, see Practice Note: Automatic exchange of information—the Common Reporting Standard: a summary.

What is FATCA?

FATCA is a US law designed to prevent tax evasion by US citizens using offshore banking facilities. The FATCA regime is contained in:

  1. Chapter 4 (Taxes to enforce reporting on certain foreign accounts) of Subtitle A (Income taxes) of Title 26 (Internal Revenue Code) of the United States Code (USM), and

  2. Final Regulations, TD 9610 (Regulations relating to information reporting by foreign financial institutions and withholding on certain payments to foreign financial institutions and other foreign entities) published on 28 January 2013, 6 March 2014 and 6 January 2017 respectively (the FATCA Regulations). Correcting amendments to the FATCA

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