The Foreign Account Tax Compliance Act (FATCA) is a United States legislation designed to improve tax compliance by US persons, both individuals and entities, who hold financial assets and accounts outside of the USA, either directly or indirectly through financial institutions, entities or other structures. The income from such assets may be subject to US taxation and with effect from 01 July 2014, FATCA has required global financial institutions to identify and subsequently report the accounts of US persons.
If you are considered a US person you may be asked to supply BLME with additional information/documentation. If you are a US person under FATCA, BLME will be required to report information about you and your account to HMRC. While we will correspond with affected customers, BLME cannot offer any advice relating to FATCA, and we recommend that you contact a professional tax adviser to discuss your personal tax situation.
For most customers, FATCA will have minimal impact and there will be no action required. However, BLME may still contact you to confirm your status as a non-US person.
A joint account which has one US owner is treated as a US account and therefore the entire account is subject to the FATCA legislation.
FATCA is an on-going process. If your account information changes, we may be required to contact you to obtain additional information to confirm your classification under FATCA. We will be reviewing all existing customers to ensure that US owned accounts and entity accounts are correctly identified and reported where required. In some cases this will require BLME to request further information and documentation from customers and we will contact customers if information is required.
In order to ensure compliance, FATCA requires financial institutions in some circumstances, to apply a 30% withholding tax on income paid to some entities including non-compliant financial institutions and to non-compliant individuals known as Recalcitrant account holders. However under the IGAs (Inter Governmental Agreements) signed between the US and many jurisdictions, generally payments to US persons will be reported and no withholding will apply, except in certain limited circumstances.
FATCA does not replace the existing US Tax regimes, it may however add additional requirements to the existing tax rules you may already follow. We recommend you contact a professional tax adviser to discuss your personal tax situation.
BLME is committed to being fully compliant with FATCA.
BLME may not open new accounts or offer additional products and services to customers who choose not to comply with requests for documentation to establish a customer’s status under FATCA.
BLME may exit the relationship with customers who decide not to provide the necessary information and documentation within the regulatory timeframe.
BLME may also need to report information about customers who do not provide the required documentation to us.
From May 2015, BLME will be required to annually report to domestic tax authorities information concerning the accounts of US persons, non-compliant account holders and certain US owned entities. This information will subsequently be exchanged with the IRS in accordance with the terms of the IGA.
Please note that customers who do not provide requested information will be treated as non-compliant and will be reported to the tax authorities.
The information reported to HMRC will depend on the FATCA classification of the customer. This information will typically be of a personal nature (e.g. name, address, US taxpayer identification number), and of a financial nature (e.g. account number, account balance/value).
We will be communicating with the affected customers and we will provide access to a portal in order to facilitate the collation of the required information/documentation.