39.3.1 Background

On 12 September 2012, the UK and US signed a treaty to implement the Foreign Account Tax Compliance Act (FATCA) in the UK. This is known as the UK/US Inter-governmental agreement (IGA). FATCA is legislation which came fully into effect in July 2014 with the aim of combating tax evasion by US tax residents using foreign accounts. One of the most significant consequences of FATCA is that it requires financial institutions in the UK – including certain trusts – to register with the US Internal Revenue Service (IRS) and then pass information about payments they make to their US customers to HMRC in the UK for onward transmission to the IRS.

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