FATCA – what do you need to do next?
Well you did it – you mastered the minefield of FATCA and where appropriate you decided whether your client or your firm was a Financial Institution and registered for a GIIN; or you decided the trust was a Non-Financial Foreign Entity and did not register although you may have had to supply information about the trust to an intermediary. What now?
Register with HMRC in order to report
At our recent HMRC Agents’ Advisory meeting we learnt a few useful snippets. For example, although 22,000 registrations have occurred with the IRS only 2,000 registrations have occurred with HMRC – I am not surprised as the accountancy world has been focused understandably with the 31 January deadline for submitting tax returns! However, it was pointed out that to be able to report it is necessary to register with HMRC.
If you are going to submit a FATCA return on behalf of an FFI you will need to register with HMRC using HMRC’s online services. This service is available through the Government Gateway.
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HMRC will then provide you with a FATCA ID for your firm and an HMRC registration identification number for each FFI you have registered.
There are two ways of reporting – by uploading a return using XML which is available on the on the FATCA service above or for simple, nil returns or for just a few cases you can use the Portal screens. Apparently, it is easy to de-register if you should not have registered.
Please note nil returns do have to be reported and there is no current plan to say you can stop reporting nil returns after you have filled in nil returns for a number of years.
Does your trust have a US person?
Where you do have an US person then great care is needed to match up exactly their personal GIIN with the trusts’ GIIN – a failure to match them up correctly results in big penalties apparently.
A representative from Barclays Bank plc at the meeting did point out that there will be practical problems where a US person is a life tenant of an English trust and enjoys no income as such but occupation of a property – this will be a ‘benefit in kind’ in the US and would have to be valued and reported.
Timing and reporting
Watch what it is you are reporting on – for the first report due by 31 May 2015 you are reporting on income and gains received in the period between 1 July and 31 December 2014 and thereafter on each 31 May you will be reporting on the prior calendar year. This will make obtaining the right information difficult in time given we are used to having reports and producing accounts for our tax year ending 5 April. This may mean you will have to prepare two sets of accounts each year and obtain broker’s information in a different format in order to comply.
There is now a small team at HMRC dealing with FATCA and you could write direct to them with particular questions on firstname.lastname@example.org.
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