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Post Info TOPIC: FATCA - Foreign Account Tax Compliance Act


Master Book-keeper

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Date:
FATCA - Foreign Account Tax Compliance Act


OMG  - Smacking my head against a wall with HSBC this morning!

Can anyone confirm if I have this correct, or if I have truely and totally lost the plot.

Entity concerned in UK (england & Wales) regsitered, private Limited company, all UK participants, all income from UK sources, probably 98% of income is from trading (service industry - no it is NOT my business!), with a tiny part from investment income.

So under the FATCA definitions I have this down as a NFFE - ie a Non-Financial Foreign Entity.   (foreign to the Americans of course because its all their bloody fault we are filling in such rot!!!!!!!)

Then I have two choices - an Active NFFE or a Passive NFFE.   I think this one is an 'Active' NFEE, given it has more than 50% from non investment type income - am I correct?

Of course the FACTA info is about as clear as mud, or maybe thats just when you have already spent 1 1/2 hours on clients bank about 3 other complaints and I should grab a brew, a headache tablet or three and start with a fresh mind.

I have criteria showing as:-

Active NFFE

the entity is not a financial institution;

 - generally, less than 50% of such entity's gross income for the preceding calendar year is passive income; 

and,

less than 50% of the assets held by such entity at any time during the preceding calendar year are assets that produce or are held for the production of passive income (see glossary for the definition of passive income).

Passive NFFE

the entity is not a financial institution or an Active NFFE.

- Generally a Passive NFFE is an entity that primarily earns passive income (e.g. interest, dividends, rents, royalties, etc.).

- An entity primarily earns passive income if more than 50% of its gross income over the last three-year period is passive income. 

 

also found this https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim404040

and 

https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim404020

Mucho appreciate any assistance.



__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Posts: 3904
Date:

Hi Joanne

Based on the criteria you've shown, definitely an active NFFE.

Edited to remove last paragraph, wasn't relevant

 



-- Edited by Leger on Tuesday 14th of August 2018 10:44:50 PM

__________________

John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Master Book-keeper

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Posts: 8646
Date:

Thanks John, thats good to know.

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position

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