Hansuke

This Practice Note provides a broad overview of the application of Foreign Account Tax Compliance Act (FATCA) to employee incentive arrangements in the UK.

The US tax rules known as FATCA require foreign financial institutions (FFIs) to provide certain information to the US Internal Revenue Service (IRS) regarding their account holders so as to avoid being subject to a 30% withholding tax on certain payments received by the FFI, unless the FFI satisfies certain conditions. The critical FATCA definitions of an FFI and an account holder can include pension schemes (and trustees) and their members respectively. This Practice Note considers the application of FATCA to UK-registered pension schemes and certain unregistered schemes that provide similar pension benefits.

This Practice Note considers some frequently asked questions in relation to the agreements entered into between the UK and its crown dependencies and overseas territories for the exchange of information on financial accounts, known as Crown Dependency/Overseas Territory (CDOT) Agreements. It deals with reporting of information relating to periods up to the end of 2016, reported in 2017, before CDOT was superseded by the Common Reporting Standard (CRS). This Practice Note was produced in partnership with Ali Kazimi of Hansuke Consulting.