Are you ready for the Foreign Account Tax Compliance Act?
New legislation known as FATCA (Foreign Account Tax Compliance Act) requires certain UK based legal entitles to register and provide information to HMRC.
A so called “foreign financial institution” (FFI) is an entity that:
- Accepts deposits in the ordinary cause of banking or similar business;
- Holds financial assets for the account of others, as a substantial portion of its business; or
- Is engaged primarily in the business of investing in securities, partnership interests or commodities.
This legislation is wide ranging and potentially applies to UK based Trusts, financial institutions and UK holding companies with investment subsidiaries.
It is up to each entity to consider its particular circumstances and establish whether FATCA applies. This determination should be made before the end of 2014.
From January 2015 banks and other financial institutions and FFIs may be required to withhold payments to entities which should be registered but are not or may even be required to cease operation of the accounts of non-compliant entities.
It is therefore important that you take immediate action if you think FATCA applies to your trust or company.
You may already have been contacted by your accountant or tax adviser about FATCA and guidance is available at www.hmrc.gov.uk/fatca. However, if you would like any further advice, please get in touch.
Call: 028 9024 2450