HMRC - Implementing the UK-US FATCA Agreement
- ABCUL supports the inclusion of credit unions within the definition Financial Institutions with a Local Client Base and that, as such, our membership will in large part be “deemed compliant” and will not have to report under FATCA.
- We are concerned, however, that requirements arising from the UK-US FATCA Agreement will impose a potentially costly burden upon our member credit unions and therefore urge HM Revenue & Customs to retain the category of “non-registering local bank” in its FATCA rule book—as is proposed in the US Internal Revenue Service (IRS) proposed FATCA rule – and also include credit unions within the definition of “non-registering local bank”.
- Credit unions have common bond limitations which generally prohibit individuals who are not residents of Great Britain from becoming credit union members but a very small number of British credit union members may also be considered “non-resident aliens” of the United States. We suggest therefore that HM Revenue and Customs’ FATCA rules not apply to: (1) citizens of the UK (including British Overseas Territories) or another EU Member State or a Crown Dependency; (2) individuals holding a visa allowing residency in the UK or another EU member state or a Crown Dependency; or (3) to individuals who meet the UK tax residency test.
- We believe that the proposed FATCA US$50,000 reporting threshold for customer accounts should be increased to £85,000 per customer to align it with the FSCS protection limit. Alternatively, we believe that the US$50,000 threshold should be denominated in pounds sterling and indexed periodically by HMRC if HM Revenue and Customs does not increase the threshold to £85,000.
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