It has been a busy few weeks for those following the
implementation of the US FATCA regime – the new rules by
which the US tax authority is seeking to prevent US taxpayers from
avoiding their US tax obligations by moving money abroad. As we
reported last year, "financial institutions", including
private equity and venture capital fund managers, have been trying
to work out how to prepare for the potentially enormous burden of
FATCA compliance – with relatively little time, and very
little finalised law to guide them. This has now changed: the UK
and US governments have recently issued key regulations.
As is well known, in an attempt to deal with some very
significant legal and practical difficulties for those affected by
the US's FATCA rules, a series of "inter-governmental
agreements" are being discussed between the US and national
governments. In December, HMRC (the UK's tax authority)
issued important draft UK regulations setting out how Britain
plans to
