The key driver for the guide, from the Society of Trust and Estate Practitioners (STEP), the Law Society of England and Wales and the Institute of Chartered Accountants in England and Wales, is their concern of a misconception among some practitioners that only trusts with US connections or assets have to take note of FATCA.
But all UK trusts need to think about their status under FATCA and many may need to register with the US tax authorities (IRS) ahead of an autumn 2014 deadline, the guide explains.
A flowchart is included, which asks a series of questions to determine if a trust needs to register to ensure compliance with the new regulations.
The chart starts for everyone with the question ‘Is the trust UK tax resident?’ and one route from there is to answer yes, which in turn leads to ‘Is the trust a charitable trust?’ If the answer here is yes again, the trust does not need to register or report.
STEP deputy chief executive George Hodgson said: “The reality is that all UK trusts need to think about their status under FATCA. In particular, trusts with corporate trustees or who use discretionary fund managers may need to register with the IRS. Even if the trust does not need to register with the IRS, banks and fund managers used by a trust will be requesting trustees to confirm the trust’s FATCA status as part of their due diligence processes.”
Hodgson added that while there are still some issues to be resolved in the UK-US IGA regulations, the core building blocks of the agreement are now well established.
Click here to read about a top official’s view that the Foreign Account Tax Compliance Act will not be postponed again.
