UK: Updated FATCA guidance; BEPS deliverables

UK: Updated FATCA guidance; BEPS deliverables

HM Revenue & Customs (HMRC) released updated guidance on implementing the International Tax Compliance (United States of America) Regulations 2014 (SI 2014/1506), along with a list and description of the material changes made.

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This latest guidance supersedes the February 2014 version and incorporates changes as a result of amended U.S. regulations. Further amendments to UK rules may be expected because of subsequent changes to the U.S. Treasury FATCA regulations.

HMRC indicated any significant changes will be released by means of a standalone update, and HMRC will review the guidance every six months, incorporating the updates plus any other necessary changes.

Changes to UK guidance

Amendments to UK guidance, as a result of amendments to U.S. regulations include:

  • Inclusion of eight types of deemed-compliant financial institutions
  • Inclusion of excepted inter-affiliate financial institutions
  • Amendments to limited life debt investment vehicles

The updated guidance also clarifies the situation for:

  • Execution-only brokers
  • Investment advisers and investment managers
  • When an entity can be an investment entity
  • The treatment of collateral
There are also procedural updates for financial institutions that have to identify reportable accounts and account holders—thus, clarifying certain aspects of the on-boarding process for financial institutions.
The section on trusts has been redrafted, and clarifies the circumstances when a trust would be an investment entity and, therefore, a financial institution for FATCA purposes.
There is also further guidance on when a “wrapper” product is held in trust. This will affect the status confirmed on registration, reporting obligations of the trust, and the information the trust will need to provide to banks, etc., in order to be able to continue to do business with them.
Read a  September 2014 report [PDF 798 KB] prepared by the KPMG member firm in the UK: Weekly Tax Matters (19 September 2014)

BEPS and other topics

The KPMG report also includes discussions of the following topics:

  • BEPS 2014 deliverables—Patent Box
  • Tonnage tax training commitment—PILOTs to increase from 1 October 2014
  • Indirect tax cases
  • Employment taxation
  • Individual (personal) taxation

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