Posted by Nick Day on 19 Sep 2012
The UK Government has this week signed an agreement with the USA to improve international tax compliance and implement FATCA (Foreign Account Tax Compliance Act). FATCA is designed to allow foreign bank account information to be exchanged internationally to tackle the perceived risk of tax evasion. The agreement will boost HM Revenue & Customs’ ability to obtain information from the USA to assist in tackling the problem of undeclared bank accounts.
This is the first agreement of its sort and will benefit UK financial institutions by addressing legal and administrative concerns they held in terms of with complying with FATCA. Importantly, UK registered pension schemes and tax-advantaged ISA savings will be exempt from the new reporting requirements.
David Gauke, Exchequer Secretary, stated: “This agreement demonstrates our commitment to working internationally to tackle tax evasion. It is the first of its kind and represents a significant step forward in the scope and nature of information exchange between governments. Furthermore, the changes we have achieved to FATCA implementation will provide significant benefits to UK financial institutions.”
The UK Treasury statement is attached below. Financial institutions and other interested parties will be consulted on the implementation of the agreement in the UK and draft legislation will be published later this year.
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