Treasury calls for FATCA exemptions on eve of new proposals

HM Treasury is pressuring the US government for a ‘carve out' on FATCA for low risk institutions, ahead of a draft paper due this week.

The move may help them avoid a punitive 30% withholding tax for non-compliance with the new rules. A Treasury source said the difficulties in implementing FATCA (the Foreign Account Tax Compliance Act) are considerable, as the legislation goes further than anything the UK has had to deal with before. However, it is understood to be seeking a ‘country to country’ solution which may build on the existing tax treaty the UK has with the US. It is hoped this will reduce the systems UK institutions will have to introduce, and minimise the burden on industry. Last summer the Investment Ma...