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US FATCA disclosures to affect financial and personal privacy for international expats
| Published: | 11 Jun at 6 PM |
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The controversial US FATCA tax-avoidance scheme, due to come into effect next month, will not only affect USA citizens, but also international customers of US banks.
According to FATCA rulings, all international customers of US banks and financial institutions, wherever they are in the world, must provide their personal and financial details to the US tax authority. No matter whether they have no connection to the US in any way, they must fill in Form W-8BEN to prove they are not liable to USA tax.
All customers of overseas branches of US financial entities are considered to have financial status under the new FATCA rules and must report annually on their worldwide financial activity. The information thus received by the IRS will be automatically sent on to the tax authorities in the customer’s country of origin.
For example, 125,000 non-US citizens with accounts at the British branch of JP Morgan have been sent the forms and are reqyired to reply. JP Morgan UK is a subsidiary of the US parent company, is regulated by the UK FCA authority and hosts its call centre in Britain.
The financial and personal details of all its local and UK expat account and investment holders will now be stored in the IRS’s databases. According to one dissatisfied JPM customer, the required IRS form makes its HMCE equivalent seem like child’s play.
According to media reports, many receiving it are voting with their feet by taking their business elsewhere, mostly due to the invasion of privacy rather than any attempt at tax avoidance. Worse still, from 1 July all British investors opening new accounts will, whether the company is UK or US-registered, be forced to provide invasive information required by the IRS through FATCA. Financial experts are describing the issue as a grand-scale worldwide harvesting of private information.
According to FATCA rulings, all international customers of US banks and financial institutions, wherever they are in the world, must provide their personal and financial details to the US tax authority. No matter whether they have no connection to the US in any way, they must fill in Form W-8BEN to prove they are not liable to USA tax.
All customers of overseas branches of US financial entities are considered to have financial status under the new FATCA rules and must report annually on their worldwide financial activity. The information thus received by the IRS will be automatically sent on to the tax authorities in the customer’s country of origin.
For example, 125,000 non-US citizens with accounts at the British branch of JP Morgan have been sent the forms and are reqyired to reply. JP Morgan UK is a subsidiary of the US parent company, is regulated by the UK FCA authority and hosts its call centre in Britain.
The financial and personal details of all its local and UK expat account and investment holders will now be stored in the IRS’s databases. According to one dissatisfied JPM customer, the required IRS form makes its HMCE equivalent seem like child’s play.
According to media reports, many receiving it are voting with their feet by taking their business elsewhere, mostly due to the invasion of privacy rather than any attempt at tax avoidance. Worse still, from 1 July all British investors opening new accounts will, whether the company is UK or US-registered, be forced to provide invasive information required by the IRS through FATCA. Financial experts are describing the issue as a grand-scale worldwide harvesting of private information.
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