The likely Inter-Government Agreement (IGA) between Guernsey and the US and FATCA were the latest topics of the STEP Guernsey’s seminar series that took place this month sponsored by Collins Stewart.
The seminar speaker, Tony Mancini, KPMG executive director, discussed the timing of the IGA and its implementation, where it diverges from proposed FATCA regulations and other key points coming out of the IGA.
“Since Guernsey announced that it is negotiating an IGA with the US (along with the other Crown Dependencies), the provisions of this agreement are more important to Guernsey businesses than the actual FATCA rules,” said Mr Mancini.
Mr Mancini explained that the IGA means that the reporting requirements, on US persons holding assets or investments in Guernsey, become Guernsey law.
“Guernsey financial institutions report to States Income Tax not the US Inland Revenue Service (IRS). Therefore there is no FFI Agreement with IRS, there is no withholding of tax required by Guernsey financial institutions and no requirement to exit relationships with investors who don’t provide the necessary information.
“Guernsey financial institutions will need to report all income sources and assets, not just US-source income as required under FATCA.
“The customer due diligence requirements, under both FATCA and the IGA, are now much more aligned with normal anti-money laundering rules.
“However, there are still a number of uncertainties as to how the IGA rules will apply to trusts and funds in particular. Guernsey is working with Jersey and the Isle of Man to identify areas such as these which need clarification from the US,” Mr Mancini said.
The IGA is expected to be signed this year and consultation on the detailed guidance on how it will be implemented will be in early 2013.
Head of Collins Stewart Wealth Management in Guernsey, Charlie Roger, said: “It is vital that Guernsey trust practitioners are familiar with FATCA and get the clarification needed to ensure compliance.
“We are very lucky to have professionals like Tony Mancini on the island and we’re sure his lecture on the subject has provided invaluable information to those attending.”
The next Collins Stewart-sponsored STEP Guernsey seminar will take place on Wednesday 12 December with speaker Piers Master from Charles Russell LLP discussing UK changes to high value property.
Category: Finance & Business