As FATCA continues to gather steam in the US, an increasing number of American citizens abroad are being swept into its web, or coming to realise their new tax responsibilities. If this sounds familiar then we can help you to plan for any potential liability and correctly report your tax under the new FATCA rules.
If you are unfamiliar with the Foreign Accounts Taxation Compliance Act, then it is worth briefly summarising. The act, newly signed into law by President Obama, aims to recoup some of the billions of dollars in lost tax revenue that the US misses out on each year because it is held in foreign accounts. The main targets of the act, it has always been said, are wealthy individuals, using offshore accounts to protect their holdings, but if you are a US expatriate then it is likely you will be caught up in the FATCA laws at some point, or have already come into contact with them.
What’s more, the ruling has impacted Americans abroad in practical ways too. As well as necessitating extra reporting from individuals (a new ‘Form 8938’ must be completed by those who have foreign assets), FATCA also requires foreign institutions to report on assets they hold for US nationals. That means that if you have a UK bank account, the bank is now obligated to report your account’s existence (and therefore your tax liability) to the US authorities.
Whilst this may firstly present a tax worry, there are also logistical worries. On announcement of the new law, some institutions stopped offering US expats banking facilities, due to the reporting pressures such a move would place upon them. Reports of this sort of occurrence have slowed but, without a doubt, there are still potential problems here for US expats.
Though FATCA can seem like a particularly troubling bit of tax legislation for US nationals in the UK, we can help! With offices in both countries, we are ideally placed to make sure that your assets are arranged in the most efficient way possible and to make sure that you are meeting all of your reporting requirements. Our experts are proficient in both UK and US tax law, as well as new schemes, such as FATCA, which could have a big impact on you.
Whatever your plan for addressing your FATCA concerns, do make sure that you begin to implement it early. FATCA fines for failing to disclose foreign assets are $10,000, with more to come if you ignore IRS notices.
If you’d like to talk through your situation, find out more or discuss how we might be able to help, you can get in touch with us via our contact page here.Posted In : FATCA, Expatriate, Tax