Today HMRC released updated Guidance Notes on implementing FATCA in the UK. The Guidance Notes effectively align the timings under the UK Intergovernmental Agreement with those announced in the recent IRS Notice, which sets out a delayed implementation timeline for FATCA.
The guidance provides clarity on a number of points which we will be analysing in detail over the coming days. We have outlined some immediate stand-out points below:
- Registration – confirmation that the registration portal is expected to be available from August 2013 and the IRS will publish guidance on the process.
- Reporting – confirmation that there will be no reporting in respect of the calendar year ending 2013 and the first reporting date will now be 31 May 2015 in respect of the calendar year 2014. The subsequent required information to be reported remains the same.
- Holding Companies or Treasury Centres – the UK has broadly aligned this definition with the US Regulations in that if these entities are formed in connection with or used by a CIV, mutual fund, hedge fund, private equity fund or other similar investment vehicle then they will be considered FIs.
- Preexisting Entity Accounts – Preexisting Entity Accounts that are identified as Reportable US Accounts are only reportable from the year in which they are identified as such.
- Due diligence dates – confirmation that a Preexisting Account is one maintained as of 30 June 2014 and a review of Lower Value Accounts and entity accounts must be completed by 30 June 2016 and High Value Accounts by 30 June 2015.
- Tax residency of account holders – there is a requirement to establish the tax residency of account holders from 1 July 2014. In order to allow FIs time to adequately prepare, FIs are allowed to introduce systems for collecting and maintaining information regarding tax residency from 1 September 2013.
- Accounts that are closed prior to 30 June 2014 – these accounts will not be reportable, however, where an account is closed on or after the 30 June 2014 and the FI has no continuing contractual relationship with the account holder the account should be treated as reportable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.