Government signs deal to implement FATCA

The US and five European governments including the UK have agreed to share information on US account holders in an effort to crack down on offshore tax evasion.

The tax agreement takes the countries a step closer towards complying with the US Foreign Account Tax Compliance Act (FATCA) - part of US legislation that aims to combat tax evasion by US tax residents using foreign accounts.

FATCA requires Americans to disclose overseas holdings directly to the US Internal Revenue Service. It also requires foreign financial institutions to tell the IRS about offshore accounts controlled by Americans if assets in them are worth more than $50,000 (£32,000).

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Comments

It remains vital for all UK

David Treitel | | Permalink

It remains vital for all UK advisers to identify US persons before giving advice as many standard UK tax planning techniques can be "toxic" when there is a US person involved.

I am deeply involved in FATCA and the IGA at a central policy level and spend a great deal of my time these days simply advising accountants and tax advisers on how to become "US friendly". This is not a difficult skill to learn; but in this new universe where all governments and tax authorities are cracking down on tax evasion it is compulsory for each of us to learn which of our clients are American, what FATCA is and what the next steps are we should each be taking.

David Treitel,

American Tax Returns Ltd - david.treitel@americantaxreturns.co.uk