IMA proposes ‘local exemption' to bypass FATCA tax

Industry proposes changes to ‘onerous' US tax regime due to come into force in 2013, amid fears over 30% charge for breach of rules

The Investment Management Association (IMA) has proposed a solution to help UK investors escape an “impossible” set of US tax rules due to come into force in 2013. Last week the deadline passed for responses to the second notice from the Inland Revenue Service (IRS) on FATCA, or the Foreign Account Tax Compliance Act, designed to prevent offshore tax evasion.  Stephen Lynam, the head of tax at the IMA, said the association is lobbying for changes which would see funds that use local distributors exempt from the rules. He said the latest notice on FATCA from the IRS outlined a poten...