Published 6 Jul 2016


In recent years there have been a number international initiatives based around the common goal of collecting more information about the tax affairs of individuals and companies. These initiatives are now creating a new level of responsibility for businesses such as JTC and whilst we recognise our obligations to comply with these regulations, our objective is to do so in manner that is also consistent with our aim of ensuring the highest standards of client data security and confidentiality.

One of these new initiatives is UK FATCA. This publication is designed to provide you with information on the impact of this new UK FATCA regime, via a series of ‘Frequently Asked Questions’ It is not intended in any way to be a substitution for, or to replace, professional advice in respect of personal tax issues but rather it is a guide that will help explain the new rules as well your obligations and those of JTC. 

1. What is FATCA?

FATCA is an acronym for the Foreign Account Tax Compliance Act and was originally a piece of US legislation with the fundamental objective of identifying US persons who may be evading tax through the use of accounts or entities held outside of the US. US FATCA requires countries across the globe to enter into Inter-Governmental Agreements (IGA) with the US to automatically exchange account information where those accounts are held for the benefit of US citizens on an annual basis. This process will continue with the US as they are not adopting the Common Reporting Standard (CRS) which is an international initiative developed by the Organisation for Economic Co-operation and Development (the “OECD”) aimed at collecting account information on behalf of over 100 countries. 

2. What is UK FATCA?

The United Kingdom was an early adopter of US FATCA and using that legislation as a template, has now entered into its own IGAs with the Crown Dependencies (Guernsey, Jersey and the Isle of Man) and the UK Overseas Territories (including the British Virgin Islands and the Cayman Islands).These agreements are generally and collectively referred to as UK FATCA. It is important to note UK FATCA is essentially a temporary arrangement as the UK is an early adopter of the CRS, which will supersede UK FATCA when fully implemented. 

3. When does UK FATCA start?

UK FATCA came into effect on 1st July 2014, the same date as US FATCA, with reporting for 2014 and 2015 due by 30th June 2016.In 2017 it will be replaced by CRS reporting.

4. How does UK FATCA affect entities managed by JTC?

Any entity or trust that is resident in the United Kingdom, the Crown Dependencies or the UK Overseas Territories is now legally obliged to undertake a classification under the UK FATCA regime. Once this classification outcome is known, it will determine what additional actions, if any, might be necessary by that entity.

5. What do you mean by ‘classification’ of an entity?

Every entity (including Trusts) needs to determine whether it is a Financial Institution (FI) or a NonFinancial Entity (NFE) and there are sub-categories of each status. There are rules that guide the assessment and categorisation of any given entity and it is these rules that JTC will follow to determine the status of all relevant client entities.

6. What difference does that classification have on reporting?

Broadly speaking, an entity that is a Financial Institution will have some reporting obligations itself, whereas an entity that is a Non-Financial Entity has no direct reporting requirements but where that entity holds accounts (e.g.: a bank account) with another Financial Institutions they may have to make a report depending on the circumstances.

7. What reporting will be made to the UK?

Where an entity that is classified as a Financial Institution has ‘account holders’ (which definition includes beneficial owners of companies and beneficiaries of trusts) resident in the United Kingdom it will be obliged to transmit data in respect of that person to the tax authorities within its home jurisdiction who will then share that information on an annual basis with the UK tax authorities.

8. What reporting will the UK make?

The arrangements are reciprocal so a UK entity that is classified as a Financial Institution has ‘account holders’ resident in the UK Crown Dependencies or the UK Overseas territories will be obliged to transmit data in respect of that person to the UK tax authorities which will then be shared on an annual basis with the tax authorities of the account holder in the UK Crown Dependencies or the UK Overseas territories as applicable.

9. I am not UK resident so why are you telling me about UK FATCA?

Even where it is known that there are no UK, Crown Dependency or Overseas Territory account holders, an entity that is resident in one of these jurisdictions will have certain obligations depending on its classification. In some cases, this will include a legal obligation to undertake an enhanced file review. There is not an ‘Opt Out’ for this part of the process even if an entity anticipates that it will have nothing to report. During this process we may require additional information and your co-operation is vital even if you are content that you are not a UK resident. (See FAQ 16 below for further details).

10.  I am UK domiciled, but I am not UK resident, so is UK FATCA relevant to me?

UK FATCA only seeks to capture information about those persons who are tax resident in the UK so if you are UK domiciled but non-resident there should be no reporting to the UK via this process. 

11. I am UK resident so what does UK FATCA mean to me?

If you are a resident of the United Kingdom, and have interests in the Crown Dependencies or the UK Overseas Territories you are defined as an account holder and it is likely that information will be transmitted as to those interests. This will include your personal details and identifying information in order that the UK Tax Authority can correctly identify you. The UK entities will be making reciprocal reporting about residents of the Crown Dependencies or the UK Overseas Territories.

12. While I am UK resident I am still non-UK domiciled does this make any difference?

No. UK FATCA only seeks to capture information about those persons who are tax resident in the UK so reporting is applicable even if you are non-domiciled. 

13. Am I an ‘Account Holder’?

In the situation of a bank, the account holders are simply the owners of the bank accounts held with that bank. In the case of entities that are administered the situation is a little more complex, for example:

Type of Entity Account Holders might include
Company The Shareholders (including those for whom shares are held on a nominee arrangement); or holders of certain types of debt interest in the company
Trust  The Settlor, some Trustees, Protectors, and certain types of beneficiaries (where there are benefits being provided or the class of beneficiary has a defined right to any part of the capital or income of the Trust)
Partnership The Partners 
Fund vehicles  Most ‘investors’ in a fund will potentially be seen as an account holder. 

14. What if I am uncertain as to where I am resident for tax purposes?

The rules on Tax Residence are a complex subject, and different jurisdictions will have different tests as to what makes a person resident or non-resident. It is also quite possible for an individual to have multiple tax residencies due to time spent or the ownership of property in one jurisdiction or another. If you are in any doubt as to whether you might be tax resident in a jurisdiction caught by UK FATCA, we would advise you to seek personal tax advice as a priority.

15. What information will be reported?

  • The name, address, date of birth and National Insurance Number (NI) of each individual account holder.
  • In the case of a UK owned foreign entity the same details for each substantial UK owner.
  • The account number.
  • The account balance or value at each year end.
  • Gross dividends, interest and other income paid or credited to the account in the year.

16. What information do you need from me? 

Much of the information that is required to be reported upon should already be held on our records. In certain circumstances, we may require your assistance with accessing information to value certain interests within underlying structures, or simply require you to confirm your tax residencies, National Insurance numbers or Tax Identification numbers. Where this is the case, we will write to you directly under separate cover.

17. What if I do not give you this information?

Depending on what information we already hold on you, we may already be in possession of sufficient data to exchange information under the normal reporting format. If there is currently insufficient information for the enhanced file review and you do not respond, or refuse to provide such information upon request, we may thereafter be required to report information on your interests as a ‘non-responder’ to the tax authorities.

18. What if my circumstances change?

As any changes to your personal details might have an impact on what information would be disclosed to the tax authorities, we ask that you notify us in a timely fashion should any of your personal details change.

19. Will you be deducting any amounts from payments that you receive or that you send to me in respect of the entity under UK FATCA?

No. We are not required to make any deductions or withhold any taxes on payments received or payments made under the UK FATCA regime. [What about any ‘UK FATCA admin’ fees?]

20. Will I see what you will report in advance?

JTC will use its best endeavours to provide you with a copy of what is to be reported in advance of its filing so that you are aware of what information we have given and can provide this to your tax advisor. The reporting is a legal obligation based on the records we hold and is not optional.

21. If I move the entity to another jurisdiction is the reporting avoided?

No. We still have to undertake an enhanced file review and if applicable report on the account holders of an entity that we have administered since 1st January 2014. In addition UK FATCA is to be replaced by CRS, which will see similar information shared between 100+ jurisdictions in the next two years.

22. What if I want further information?

We are always on hand and willing to discuss how we can assist clients in respect of those entities we administer and your usual relationship team will be able to direct any queries internally. JTC Group do not provide tax advice so if your query relates to your personal tax and residency circumstances we recommend you seek third party tax or legal advice and we will be happy to make introductions to potential suppliers of these services if required.


This publication is intended to provide an overview of the subject matter (errors and omissions excepted) and is not comprehensive in nature or to be construed as legal, tax or investment advice. We recommend that clients seek professional advice on any particular matter. 

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