FATCA registration for Trusts

FATCA registration for Trusts

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I am either a Trustee of or act for a number of family trusts which have investment portfolios managed by a fund manager. It would appear that these are considered to be Financial Institutions by the US authorities and our government has agreed to ensure that these have to complete details via HMRC that will be transferred to the IRS in the USA. Some portfolio managers will undertake the registration and reporting process for the Trusts they manage but only where they manage all the assets, but others will do nothing (Barclays for example). Although the ICAEW has issued a guidance note in September's Taxline, this does not explain the registration process fully. I am filling in the IRS online registration form in order to obtain the necessary GIIN number which should eventually result in a requirement to complete an HMRC FATCA return (probably a nil return in each case as no USA involvements).

Not sure that as a tax agent I can complete the HMRC forms as cannot find them on my agents login online, will this be available to agents ?

Any good feedback from accountants who have gone through the process ?

And finally a general warning to all that this is out there and needs urgent attention where acting for Trust clients, as registrations due by the end of the year.

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By susanna russell-smith
17th Oct 2014 14:57

Registration nightmare!

I can't help you I'm afraid but wonder if you can help me please! And actually, 25 October seems to be the real deadline! 

I am in almost the same position as you but am in dire need of help as regards the IRS registration form in that I cannot decide which of the 4 categories describes the Trust correctly. My problem is question 4 in the F1 Registration process: "The Financial Institution's FATCA classification in its country of tax residence".

I think I'm a "Registered Deemed compliant FI including a reporting FI under a Model 1 IGA." but I'm not sure!  

Do you know the answer please?

Bit hopeless if I can't even get past this question!

 Here is what DLA Piper say:-

What is a Registered Deemed Compliant FFI?  It is (i) an FFI that is registering to confirm that it meets the requirements to be treated as a registered deemed-compliant entity under the US Treasury Regulations; (ii) a Reporting FI under a Model 1 IGA and that is registering to obtain a GIIN; or (iii) an FFI that is treated as a Nonreporting FI under a Model 1 or Model 2 IGA and that is registering pursuant to the applicable Model 1 or Model 2 IGA.

 

Do you think that's us?

Thanks for any help...

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By hedglen
17th Oct 2014 16:24

My Understanding


...is that if the portfolio is professionally managed on a discretionary basis (and there are no other assets, eg a house), providing the stockbroker agrees to act as the withholding agent, then there no requirement to register on-line. The stockbroker will disclose the trust's assets to the IRS as required.

The ICAEW/Law Society/STEP have produced a flowchart that sets out how to decide what the Trust 'is' and you need to know whether the trust is managed on a discretionary/advisory or execution only basis.

I have had to register a few trusts because they had other assets as well as the portfolios. Registration is actually painless if you are a Trustee, but you have to register each Trust separately. If you are an agent, you will need to ask the Trustee to register as there is a declaration by the Trustee in the registration process.

The IGA model that the UK has with the USA is 'similar to a 1' and so I ticked the model 1 option. You can always go back into the IRS account and change it.

Hope this helps!

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By hedglen
17th Oct 2014 16:26

Oh and...

....the forms to send to HMRC once registration is complete are not due to be submitted until May next year (I think!).

I don't think they have been published yet.

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Replying to CMPACDGDB:
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By David Treitel
17th Oct 2014 22:36

HMRCs FATCA reporting page went live this past week:

http://www.hmrc.gov.uk/fatca/reporting.htm

 

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By richard leighton
17th Oct 2014 16:50

Which classification

in response to Susanna's question I came to the same conclusion that Registered Deemed-Compliant FI (including a Reporting FI under a Model 1 IGA) was the correct box. Certainly the UK has signed up as a model 1 IGA.

Hedglen, note what you say BUT not all Stockbrokers are undertaking the registration for even the simplest Trusts with a portfolio. Make sure you get their agreement in writing, Barclays Wealth Management are not doing one of mine whereas other brokers are doing. The problem ones are where there are other assets, and these may require direct registration.

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By susanna russell-smith
17th Oct 2014 22:27

classification

Many thanks both - Richard, that's very reassuring!  I am registering as a Trustee because of there being assets other than the stockbroker-managed portfolio, having seen all the icaew/step advice, but it was just that question which didn't seem at all painless to me.  So much gobbledygook...  

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By susanna russell-smith
18th Oct 2014 09:06

Thanks David - rather horrifying to read of a 31 May deadline!

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By geroge
11th Nov 2014 15:53

I am involved in  a private

I am involved in  a private capacity with a family trust, and the City solicitors who set it up confirmed the following:

"If the only asset the trust holds is a deposit bank account then it is a NFFE . The consequence is the trustees will not have to register with HMRC or the IRS. Please note that if the trust held an investment portfolio then it would have to register. Therefore, as regards your trust, no action is required at the current time."

 

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