Thursday, December 20, 2012

UK on FATCA: Guidance, and more forthcoming

Here are 81 pages of "guidance notes" from HMRC on how the UK will implement its IGA, and here is a story that says more will be forthcoming in the first 6 months of 2013.  Remember, this is a moving target since everyone is waiting for final regs from the US. They were expected by the end of the year (i.e., in the next 11 days).

An interesting point for treaty interpretation enthusiasts is that the HMRC is issuing its guidance in the form of "regulations" for interpreting the US-UK treaty.  Interesting!  Interpretive regulations for tax treaties--not common, and not uncontroversial--see, e.g., here and here.  FATCA continues to deliver a treasure trove of international law questions.

1 comment:

  1. There is though a one page draft piece of legislation that will have to passed by UK Parliament in order to allow these "regulations" to be issued. I have a seen it but I don't have a link off the top of my head.

    I also note there was a Reuters article out today saying the final US rules will NOT be released until after the first of the new year. Some I have talked to have challenged the accuracy of this going so far as to say the suspect the final US regs will be released in Christmas Eve. I tend to suspect not though.

    An interesting comment from another website that I want to post in full.


    Hard to know what’s going to happen here — but I do know Ottawa has been told that there are significant charter problems with an IGA, all revolving around discrimination on “national or ethnic origin,” and that an IGA might get the banks off the hook but not the government. In other words, to implement an IGA that singles out US Persons/Citizens residing in Canada, Ottawa has to get around the Charter (notwithstanding clause?). This came in a letter from one of the country’s senior constitutional experts; a letter written a couple of weeks ago in response to that Finance Department call for submissions.

    This constitutional issue could be far more significant than anything Treasury does or doesn’t do. Would Flaherty/Harper want to override the Charter to send personal financial data on Canadians to the IRS? That would create a firestorm. I’m workin’ on this — keep your fingers crossed.

    And more:

    Letter not public yet (and I don’t have it, or believe me it would be public) — he’s apparently in the process of setting up a meeting with Finance to discuss his advice. I was told second-hand what the gist of the piece was. Apparently the only info Ottawa can collect and send to the IRS, without violating charter rights, is info on Canadian accounts held by US residents. I’m sure Carl Levin won’t think that’s enough.

    Also — I’m told that the IGA negotiations are extremely tough slogging because the Americans (remember they are trying to ink 50 of these things) are loathe to make any country-specific modifications — they are insisting on the UK version unaltered. That also might work in our favour.

    The source of this is very good in terms of having industry contacts and I suspect I know who the senior constitutional expert is because I played a part indirectly in getting him involved with FATCA many many months ago(on almost a complete whim). If this is true I can personally say my preminition is right that I have been looking down the chess board far more than the Treasury/IRS staff.