01.03 – Interaction with US Regulations

The UK regulations implement the IGA as it has effect from time to time. The Agreement now has a different effect in the following respects since it was signed in September 2012.

Annex II has been updated by mutual agreement entered into between the Competent Authorities of the UK and the US (made under the mechanism in Article 8 of the Agreement). The changes result in a wider scope of institutions and products effectively exempt from the FATCA requirements and provide greater clarity on the categories of institutions that will be Non-Reporting UK Financial Institutions under the Agreement. The Agreement is now also to be read as if it contained the changes announced by the US on 12 July 2013 about the revised timeline regarding the implementation of FATCA (Notice 2013-43). Where appropriate these changes are reflected in the UK Regulations laid on 7 August 2013. Businesses and their advisers should note that where the UK Regulations refer to actions or requirements in the Agreement the relevant text should also be read accordingly. For example when undertaking the appropriate due diligence in respect of a Pre-existing Entity Account, Section IV Paragraph B of Annex 1 of the Agreement should be read as if the relevant date therein refers to 30 June 2014 and not 31 December 2013

A Financial Institution must apply the UK Regulations in force at the time concerning the published HMRC Guidance. However where a Financial Institution identifies an alternative element of the US Regulations or alternative element of a different Intergovernmental Agreement that it feels it would like to apply then it should contact HMRC to discuss the issue.

If the US authorities subsequently amend the underlying US Regulations to introduce additional or broader exemptions, HMRC will consider whether to incorporate these changes into its Regulations or Guidance. HMRC will publish any updates on its dedicated FATCA webpage http://www.hmrc.gov.uk/fatca/index.htm and make any subsequent changes to the Regulations or Guidance as required.