WIREDGOV

Ahead of the Foreign Account Tax Compliance Act (FATCA) return deadline of 31 May, two recent updates have changed the reporting criteria.

UK financial institutions are no longer required to file nil returns

Following a recent clarification from the US Internal Revenue Service(IRS) - see question C19 - HMRC has removed the requirement for nil returns from UK financial institutions.

Where a UK financial institution is in a nil return position through applying the de minimis $50,000 or $250,000 threshold on pre-existing accounts, it will still be necessary to submit a return in order to make the election.

Holding companies and treasury companies do not need to report under FATCA

New FATCA provisions mean that holding companies and relevant treasury companies are no longer defined as financial institutions.

This is consistent with the terms of the inter-governmental agreement between the UK and the US.

Unless such companies came within one of the other definitions of financial institution, they would have had nil to report in any event. They will now be classified as Non-Financial Foreign Entities, and either ‘active’ or ‘passive’, dependant on the activities carried out.

HMRC will be issuing further specific guidance for such entities shortly, which will be subsequently incorporated into revised guidance material to be published later this year.

Submitting your FATCA return

If you need to submit a FATCA return you will need to register and report by 31 May 2015.

To access the FATCA service you will need to create an ‘organisation’ type Government Gateway account, if you do not already hold one.

Once in the Government gateway, register for HMRC online services.FATCA is then listed as a service you can register for.

You must register 24 hours before submitting your FATCA return.

To find out if you are affected by FATCA, and for details on how to submit your FATCA return, read our full guidance.