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Brits planning to emigrate should take note of son of FATCA
| Published: | 16 Aug at 6 PM |
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British would-be migrants planning to relocate to countries within the EU as well as expats already in residency will need to take account of ‘son of FATCA’-style new EU rules on financial disclosure.
According to tax experts, European Union states are preparing to issue new disclosure rules applying to the sharing of expat financial information between financial institutions, banks and tax authorities. The new rules, christened some time ago as ‘Son of FATCA’ and referring to the USA’s recently announced US Foriegn Tax Compliance Act, involve personal financial information sharing between the UK tax authorities and the former tax havens in Crown Dependencies and territories such as the Isle of Man and Gibraltar.
The European Commission is now working on the proposals, which will give the go-ahead for the exchange of individual financial information between tax offices. For example, expats in Spain with interest-bearing bank accounts in the Isle of Man will automatically have their account details routed through the UK to Spain and, if interest is not declared on tax returns, the Spanish tax authorities will query why the account-holder has not made a declaration.
The impetus for the changes rests on a European Union decision that the downside of freedom of movement is the freedom to disappear within the EU without paying taxes due.
Every EU citizen will eventually receive a unique tax reference number which stays with them wherever they go and which must be given to foreign banks by their expat customers.
The number will also appear on expat tax returns, giving tax authorities the means to tally earnings, dividends and interest payments against the taxpayer’s declaration. According to financial planners, the move will vastly complicate tax matters for legitimate tax payers, especially if assets are kept in more than one country.
According to tax experts, European Union states are preparing to issue new disclosure rules applying to the sharing of expat financial information between financial institutions, banks and tax authorities. The new rules, christened some time ago as ‘Son of FATCA’ and referring to the USA’s recently announced US Foriegn Tax Compliance Act, involve personal financial information sharing between the UK tax authorities and the former tax havens in Crown Dependencies and territories such as the Isle of Man and Gibraltar.
The European Commission is now working on the proposals, which will give the go-ahead for the exchange of individual financial information between tax offices. For example, expats in Spain with interest-bearing bank accounts in the Isle of Man will automatically have their account details routed through the UK to Spain and, if interest is not declared on tax returns, the Spanish tax authorities will query why the account-holder has not made a declaration.
The impetus for the changes rests on a European Union decision that the downside of freedom of movement is the freedom to disappear within the EU without paying taxes due.
Every EU citizen will eventually receive a unique tax reference number which stays with them wherever they go and which must be given to foreign banks by their expat customers.
The number will also appear on expat tax returns, giving tax authorities the means to tally earnings, dividends and interest payments against the taxpayer’s declaration. According to financial planners, the move will vastly complicate tax matters for legitimate tax payers, especially if assets are kept in more than one country.
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