As part of the continuing efforts to improve international tax compliance and address the implementation issues related to the Foreign Account Tax Compliance Act (FATCA), the US Department of the Treasury and the UK's HM Treasury signed an intergovernmental agreement on September 12, 2012 (US-UK IGA). HM's Revenue and Customs (HMRC) subsequently released Implementing the UK-US FATCA Agreement Consultation Document (Consultation Document) which addresses the implementation of the US-UK IGA. See Global IRW Newsbrief: United States and United Kingdom Sign First Bilateral FATCA Intergovernmental Agreement for more information on the US-UK IGA. FATCA is intended to combat offshore tax evasion by US persons who maintain accounts directly with financial institutions outside the US and requires financial institutions to report information on such account holders, as well as accounts maintained by non-US entities substantially owned by US persons to the US Internal Revenue Service (IRS).
The Consultation Document sets forth how the UK government intends to legislate and promulgate new rules consistent with the commitment by both governments to significantly increase the scope of information automatically exchanged. The Consultation Document also seeks views and comments from industry and other stakeholders on 24 specific questions (see Appendix I below). And, it requests information on the expected costs of complying with the US-UK IGA to inform an impact assessment.
Stakeholders will want to analyze how these new guidelines will affect their FATCA compliance programs, notwithstanding that ambiguities remain. They also may consider submitting formal comments to help shape legislation and guidance going forward. The consultation period is expected to run until November 23, 2012.