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Most American expats have heard of FATCA. A few know what it means to them, but most don’t like it. In reality, it’s the foreign financial institutions that the United States obligates to report, who dislike it far more than the taxpayer. Why? Because if the institutions do not comply, the U.S. government imposes a 30% withholding tax when they trade in U.S. markets.
The real threat to the American expat or U.S. taxpayer overseas is that their local foreign financial institution may deny them access to accounts or investment options due to the financial reporting obligations the institution may face when servicing Americans.
The Foreign Account Tax Compliance Act (FATCA) generally requires that foreign financial institutions and other non-financial foreign entities report on the foreign assets held by their U.S. account holders. FATCA makes it easier for the IRS to enforce worldwide taxation on American expats and those subject to U.S. taxation.
Specified Foreign Financial Assets include foreign financial accounts and foreign non-account assets held for investment (as opposed to held for use in a trade or business), such as:
FATCA is nothing to be afraid of; it simply means the IRS has more access to compare the data you are filing. It does not raise your tax liabilities; it’s just a law you must be aware of as an American Expat or U.S. Person with tax obligations in the United States. Proper and timely filing will ensure you stay compliant.
It is recommended that you speak to your tax advisor to ensure you are filing correctly and including all the required forms.
BGWM works with a range of investment providers who specialize in compliant solutions for U.S.-connected individuals. We can tailor our investments to ensure that clients who need to report back to the U.S. do so in a compliant and efficient manner.
We are also affiliated with specialist providers of tax and fiduciary guidance for our clients and make referrals to such services where appropriate and required.
Before you engage us, we’ll get to know you to make sure we’re a good fit in terms of understanding what is most important to you.
After our discovery call, we will summarise our understanding of your current situation and the key objectives which will ensure we're aligned with your goals.
Once you’re happy that we’re right for you, we’ll provide our recommendations and implement them for you. But there’s never any pressure from us to proceed – that’s just not our style.
We will implement your plan, constantly monitor and report on the performance to ensure your private wealth is optimised and aligned with your goals and working for you. Additionally, we’ll provide you with regular statements and a half yearly review to ensure that you remain up to date with any investment or tax changes and that we continue deliver for the long term.
