The UK Government took part in joint discussions with the US Government to explore an intergovernmental approach to FATCA, supporting the overall aim to combat tax evasion, while reducing risks and burdens on financial institutions. (Includes IMA response.)
The UK Government (along with France, Germany, Italy, and Spain) and with the support of the European Commission took part in joint discussions with the US Government to explore an intergovernmental approach to FATCA, supporting the overall aim to combat tax evasion, while reducing risks and burdens on financial institutions. A model intergovernmental agreement (IGA) was developed and published in July 2012.
The UK and the US subsequently signed an IGA - the 'UK-US Agreement to Improve International Tax Compliance and to Implement FATCA' - in September 2012.
The IGA reduces some of the administrative burden of complying with the US regulations, and provides a mechanism for UK financial institutions to comply with their obligations without breaching the data protection laws. Under the IGA, financial institutions pass information to HM Revenue & Customs (HMRC) who will then automatically exchange this information with the IRS.
Press release
UK/US Agreement, 12.9.12
HMRC-Regulation
HMRC-Guidance
Responding to the final FATCA (Foreign Account Tax Compliance Act) regulations issued by HMRC today, Jorge Morley-Smith, Head of Tax at the Investment Management Association, said: “We have been working very closely with HMRC throughout the consultation process, which has shaped rules that are workable for funds and fund managers, and therefore for investors. This is critical given that greater importance is being placed on FATCA as a model for automatic exchange of information by the EU, G8 and the OECD.
“The final UK regulations and guidance out today are an important stepping stone to a workable framework for automatic exchange of information, which we hope to see followed by other countries.”
Press release © IMA
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