The significant rise and popularity in the establishment of trusts has been much publicised. Extensive growth of the private client industry through financial institutions, wealth mangers, accountants and solicitors has seen access to this type of estate planning grow. It is now commonplace for wealthy and successful business people, and their families, to plan their legacies by leaving monies or investments in “trust” for spouses, siblings and other individuals.

The current rate of taxes levied on death are not likely to decrease. Clients not only take their responsibilities to their beneficiaries seriously, they are planning the most tax efficient away to protect their hard earned capital.

On September 12, 2012 the UK and USA signed a treaty to implement FATCA in the UK (The UK-US Agreement to Improve International Tax Compliance and to Implement FATCA).

The Foreign Account Tax Compliance Act or FATCA as it will be known is US legislation aimed at reducing tax evasion by their citizens. You may ask how does that affect me here in the UK?

FATCA requires financial institutions outside the US to pass information about their US clients to the US tax authorities, the Internal Revenue Service (IRS).

As a result of this agreement all UK trusts and trustees, whether or not they have any known US connections, need to consider their status under the UK/US agreement. UK financial institutions must meet the requirements of the treaty and UK legislation in order to avoid withholding tax.

A thirty per cent withholding tax (or penalty fine) is imposed on the US source of income of any financial institution that fails to comply.  If they are required to register with the IRS under the agreement, they must do so by 25 October 2014.

Gedye and Sons have been dealing with estate planning for many years. We are currently trustees to many family and business trusts. It was appropriate that as a firm we started the process of reviewing our current trusts, working with the respective trustees and liaising with them accordingly. We can assist you by:

  • Conducting a thorough review of your established trust, its legal position and update those trusts accordingly.
  • Register any trust with HMRC or IRS if required.
  • Develop an implementation plan for the changes required for FATCA compliance.
  • Perform due diligence on your affairs and explain their position and consequences.
  • Evaluating your responsibilities related to FATCA compliance.

For further information about our services, in the first instant please contact Richard Roberts, Mark Jones or Sarah Murphy on 015395 32313. Alternatively if you are an existing client, one of the above or their respective teams will contact you if required.