FATCA meaning

Checklist This Checklist sets out the principal direct and indirect tax considerations that a corporate borrower within the scope of UK corporation tax (a UK corporate borrower) ought to assess both prior to entering into a loan and over the life of that loan... It is designed to be used as a Checklist by the tax adviser to a UK corporate borrower, offering a concise outline of the relevant tax matters and providing space for the adviser to record notes... This Checklist proceeds on the basis that: the borrower is a company within the charge to UK corporation tax in relation to the loan, that is, either a UK tax resident company or a non‑UK tax resident company for which the loan is attributable to its UK permanent establishment (a UK PE), or attributable to the non‑UK resident company’s trade of dealing in or developing UK land; and the borrower and the lender are unconnected parties dealing at arm’s length ...

Automatic Exchange of Information (AEOI) is the worldwide benchmark for routinely transmitting taxpayers’ financial details between jurisdictions to deter tax evasion. A trust resident in the UK is generally brought within the UK AEOI framework through the International Tax Compliance Regulations 2015 (SI 2015/878), as amended (the ‘ITC Regulations’). The ITC Regulations give domestic effect to the UK’s AEOI commitments under the Common Reporting Standard (CRS) and the UK‑US FATCA Agreement (FATCA). Refer to Practice Notes: Automatic exchange of information-outline; Automatic exchange of information for UK trustees-key obligations; and FATCA and UK Trusts. HMRC’s guidance appears in the International Exchange of Information Manual (IEIM400000). This Checklist summarises the principal matters trustees must consider under the UK AEOI regime. Scope and Threshold Question: Does AEOI Apply? Has the trust’s UK tax residence position been determined for AEOI purposes? Has it been verified whether the ITC Regulations 2015 apply to the trust (CRS and/or FATCA)? Is the trust in scope of AEOI as a possible Financial...

Introduction High yield bonds sit within securities regulation and, save for a few narrow carve-outs, are subject to New York law irrespective of the issuer’s domicile. They are brought to market under an indenture, which also provides for the appointment of a trustee to act for the bondholders. For further detail on the high yield product, see Practice Notes: Introductory guide to high yield bonds and High yield debt in 11 jurisdictions worldwide. For a snapshot of the principal deal papers needed for a high yield issuance, see Checklist: Issuing high yield bonds-documents list. Beyond setting out the issuer’s key covenants, the indenture includes provisions required to administer the bonds and to enable the bond trustee to discharge its duties. The trustee’s core role is to handle administrative matters for bondholders before any default and, where appropriate, to pursue enforcement on their behalf. For commentary on material terms and covenants in high yield, see: Introductory guide to high yield bonds-High yield bond terms and Practice Note: Covenants and other...

Background to the consultation Between 22 March and 29 April 2022, the Organisation for Economic Co-operation and Development (OECD) undertook a public consultation, concluding with a meeting on 23 May 2022. This led to OECD-level finalisation of the rules and commentary for both the CARF and updates to the CRS, promoting consistency across jurisdictions. In November 2023, the UK, together with 47 other countries and territories—including the Crown Dependencies of Guernsey, Jersey and the Isle of Man, and the UK’s Overseas Territories of the Cayman Islands and Gibraltar—signed a Joint Statement committing to swiftly transpose the CARF into domestic law and to activate exchange agreements so that exchanges can commence by 2027. Although the OECD CARF/CRS suite followed a public consultation, it includes optional components and does not prescribe detailed practical implementation. Consequently, HMRC held a consultation from 6 March 2024 to 29 May 2024 to gather views from interested parties on: how the UK should implement the OECD’s CARF proposed amendments to...

In this issue Court of Protection UK taxation for private clients Updates to HMRC Manuals Tax avoidance, evasion and non-compliance Budgets and Finance Bills Private client insolvency Digital and crypto assets Charity and philanthropy Disputed trusts and estates Pensions, insurance and tax‑efficient investments International Further Private Client updates this week Question of the week News alerts—daily and weekly LexTalk® Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&As Useful information Court of Protection Court rules that an anonymity application under CPR 39.2(4) and section 6 of the Human Rights Act 1998 must proceed on a statutory basis (PMC (a child by his mother and litigation friend FLR) v Local Health Board) The claimant, a boy born in 2012, pursued a clinical negligence action against an NHS trust for injuries at birth. The claim, issued in March...

Webster v HMRC [2024] EWHC 530 (KB) An individual with dual UK and US nationality challenged the passing of information about her financial affairs by her bank to the US tax authorities, said to have been carried out pursuant to the agreement between the UK and the USA that gives effect to the US Foreign Account Tax Compliance Act (FATCA). She contended that HMRC, in its role as data controller, acted unlawfully in making a bulk disclosure on two bases. First, she alleged that the transfer in question violated her data protection rights because appropriate safeguards were absent for such transfers, and that US law failed to secure a level of protection for data subjects that was adequate under data protection legislation...

This Practice Note provides a broad overview of: the intergovernmental agreement between the UK and the US to enhance international tax compliance and to give effect to FATCA, signed on 12 September 2012 (the UK:US IGA), and the International Tax Compliance Regulations 2015, SI 2015/878 (the International Tax Compliance Regulations), insofar as they relate to implementing the UK:US IGA The International Tax Compliance Regulations took effect on 15 April 2015. They supersede and repeal the International Tax Compliance Regulations (United States of America) Regulations 2014, SI 2014/1506, which were in force from 30 June 2014 until 14 April 2015. The International Tax Compliance Regulations and the UK:US IGA comprise detailed and demanding provisions. This Practice Note is a summary and does not address every facet of the framework. In certain sections, it necessarily adopts a broad-brush treatment, which unavoidably trims back some of the finer detail...

IP COMPLETION DAY: At 11pm (GMT) on 31 December 2020, the Brexit transition/implementation period ended following the UK’s departure from the EU. From that moment—defined in UK law as ‘IP completion day’—core transitional arrangements fall away and major changes start to apply across the UK’s legal framework. This note provides guidance on topics affected by these developments. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [Archived]. What is FATCA? The Foreign Account Tax Compliance Act (FATCA) is US tax legislation enacted under President Obama in 2010. Its principal aim is to help the Internal Revenue Service (IRS) obtain information on US taxpayers with investments held outside the US. As first enacted, FATCA captures many categories of non‑US financial institutions, including banks as well as certain insurance companies and funds, and has a far‑reaching extra‑territorial effect. Consequently, since 2010 it has prompted extensive discussion, confusion and even anger among those likely to be affected. Partly in response, a number of...

This Practice Note sets out how issuers make payments on debt securities to investors. It also covers day count fractions and the conventions for business days in detail. Over time, the debt securities markets have fashioned an infrastructure that enables payments on the securities to pass from issuers to holders. It accommodates differing legal jurisdictions and time zones worldwide, supports multiple currencies, and aligns with a range of payment conventions as appropriate. The arrangements for paying amounts on debt securities operate within ordinary banking systems and, in parallel, outside them through central securities depositories ( CSDs ) and custodians. For further information on debt securities market infrastructure, see Practice Note: UK Debt securities—trading, settlement and custody for reference. Payments on global securities Debt securities can in principle be held in either global or definitive form (see Practice Notes: Form of debt securities—global securities and Form of debt securities—definitive securities), although, in practice, international market issues are now invariably held in global form...

Amendments to the International Tax Compliance Regulations 2015 (2015 regs), SI 2015/878, introduced by the International Tax Compliance (Amendment) Regulations 2025, SI 2025/740, have brought in a compulsory Automatic Exchange of Information (AEOI) registration obligation for certain trusts treated as ‘specified non-reporting financial institutions’. Under the 2015 regs, SI 2015/878, reg 24(1), a specified non-reporting financial institution is ‘a non-reporting financial institution which is a trust within the meaning of Section VIII(B)(1)(e) of the CRS or paragraph II(D) of Annex II to the FATCA agreement’. Set out below is a concise overview of the components of that definition. Financial institution (IEIM400610) The FATCA and CRS frameworks recognise four common categories of Financial Institution: custodial institution depository institution investment entity specified insurance company Where a private trust satisfies any Financial Institution definition, it will most commonly be treated as an Investment Entity...