FATCA Fact Sheet 1 What is FATCA?

FATCA Fact Sheet
1 What is FATCA?
2 Which clients are
affected by FATCA?
3 What do James Sharp &
Co have to do to comply
with FATCA?
4 What information may
James Sharp & Co report
to the IRS/HMRC?
FATCA stands for the Foreign Account Tax Compliance Act. FATCA
is a US legislation that effectively requires Foreign Financial
Institutions (FFIs) to check whether any of their individual account
holders are US persons or any of their entity account holders have
US persons and report relevant details.
The UK has signed similar FATCA-based agreements with both The
Crown Dependencies & British Overseas Territories. The UK-Crown
Dependency (CD)/Gibraltar Agreement requires UK Financial
Institutions to identify and report Financial Accounts held by
residents of CD/Gibraltar to the HMRC. The UK-CD/Gibraltar
Agreement is reciprocal, meaning that Financial Institutions based
in CD/Gibraltar are required to identify and report Financial
Accounts held by UK residents to the HMRC.
FATCA will mostly affect clients who are treated as a US Person for
US tax purposes and clients who have been identified as having
links to the US, such as US nationality, place of birth in US, a US
mailing address or a US telephone number.
FATCA will also affect non-US entity clients who are substantially
owned by US Persons.
The UK-CD/Gibraltar tax agreement will affect those who are
residents of The Crown Dependencies and Gibraltar.
FATCA requires James Sharp & Co to identify accounts held
directly or indirectly by US Persons and to report the relevant
account information to the US Internal Revenue Services via
HMRC.
In order to ascertain clients’ US or non-US tax status, FATCA may
require James Sharp & Co to collect additional information or
documentation from clients.
Where clients fail to provide the requested information or
documentation, James Sharp & Co is required to apply a 30% US
withholding tax on certain types of US source income paid to such
clients.
Similar information may be required for residents of The Crown
Dependencies and Gibraltar to comply with UK-CD/Gibraltar tax
agreements, including Date of Birth and UK National Insurance
Number.
James Sharp & Co is required to report information on certain
account holders, including name, address, US Taxpayer
Identification Number (if purely US FATCA based), account
number, account balance to the HMRC. For US clients, the
information will be passed on to the IRS via the HMRC.
For a non-US entity substantially owned by US Persons, James
Sharp & Co is required to also report information of the entity’s US
owners.
Information requirements for The Crown Dependencies and
Gibraltar are outlined on the James Sharp & Co self-certification
form, which will be required to be completed as part of the UKCD/Gibraltar agreement.
5 What is the consequence
if clients do not provide
the requested
information or
documentation to James
Sharp & Co?
6 What types of
information or
documentation may
James Sharp & Co
request from clients?
7 How and where can
clients get additional
assistance regarding
FATCA?
James Sharp & Co may decline account opening applications or
terminate services to such clients if the relevant information is not
provided.
James Sharp & Co may request clients to provide completed US
tax forms (W-9 forms) to support the clients’ claim of their US tax
status.
For Crown Dependencies/Gibraltar residents, James Sharp & Co
may request clients to provide a completed James Sharp & Co selfcertification form.
Please note that James Sharp & Co is unable to offer tax advice.
For tax related questions, clients should seek advice from
professional tax advisors or refer to the IRS/HMRC website.
Please Note: We will be writing to the relevant clients within the next month regarding US FATCA &
The UK- Crown Dependencies/Gibraltar agreements.