At the end of July, five European countries, France, Germany, Italy, Spain and the UK, and the US jointly published the “model intergovernmental agreement to improve tax compliance and to implement FATCA”. The agreement was later signed by the UK, with it and the US thereby making a commitment, according to HMRC, to “significantly increase the scope of information automatically exchanged”.
Click here for an explantion of how the agreement works.
The agreement was drafted after concerns were raised by financial institutions both in the UK and across Europe that they would be unable to comply with the FATCA regulations, not least due to EU-wide data protection laws, and so would be liable for a 30% withholding tax on their US assets.
The agreement has sought to address this concern, while also, said HMRC, helping the US in its intention to tackle tax evasion.
In the consultation, which was published yesterday, HMRC said it is asking for industry views on how the agreement can be implemented, with a view to putting final legislation forward in the Finance Bill 2013.
To view a copy of the consultation click here
As a representative of the asset managment industry, the IMA said in a statement: Julie Patterson, IMA Director of Authorised Funds and Tax said:
“The consultation demonstrates the UK Government’s continued commitment to ensuring the US FATCA requirements are translated into practical rules for UK firms and fund investors.
“IMA’s Asset Management Survey illustrates the grave concern that uncoordinated, extra-territorial regulations such as FATCA are causing; senior industry figures interviewed for the survey said that such protectionist regulations risked hindering global markets and limiting investors’ choice and returns.
"IMA has lobbied for final amendments to the US requirements, in addition to undertaking considerable work with the UK Government towards limiting the impact of FATCA implementation in the UK. We will continue to remain fully engaged in the interests of all investors (US and non-US) in UK funds.”
