As a way of countering tax evasions by US tax payers holding assets outside the country, the US government introduced the Foreign Account Tax Compliance Act (FATCA). It invites non-US financial institutions to sign an agreement with the Inland Revenue Service (IRS) to disclose details of their US account holders. However, FATCA creates a number of issues for UK lenders, such as breaching data protection and confidentiality obligations.
This white paper reviews the legal framework of FATCA and the additional updates that have been introduced since it came into effect. It provides insight into the various issues that lenders and their customers in the UK face in relation to FATCA.