FATCA - Inter-Governmental Agreements For Crown Dependencies

Introduction

On Tuesday, 9 October 2012 the three Crown Dependencies, Guernsey, Jersey and the Isle of Man, each announced their intention to negotiate an inter-governmental agreement ("IGA") with the US regarding the implementation of the US Foreign Account Tax Compliance Act ("FATCA"). The IGAs will follow the model IGA ("Model IGA") published by the US Government in July this year and are likely to be similar in form to that signed between the UK and the US on 12 September 2012, which has yet to be brought into force in the UK.

Background

The US Hiring Incentives to Restore Employment Act, 2010 introduced FATCA as part of US law with the aim of combatting tax evasion by US persons ("US Account Holders") who have interests in certain foreign accounts ("US Reportable Accounts"). As the US tax system is based on citizenship, US persons do not need to be resident in the US for them to be US Account Holders and for their US Reportable Accounts to fall within the