FATCA Fact Sheet 1 What is FATCA? 2 Which clients are affected by FATCA? 3 What do James Sharp & Co have to do to comply with FATCA? 4 What information may James Sharp & Co report to the IRS/HMRC? FATCA stands for the Foreign Account Tax Compliance Act. FATCA is a US legislation that effectively requires Foreign Financial Institutions (FFIs) to check whether any of their individual account holders are US persons or any of their entity account holders have US persons and report relevant details. The UK has signed similar FATCA-based agreements with both The Crown Dependencies & British Overseas Territories. The UK-Crown Dependency (CD)/Gibraltar Agreement requires UK Financial Institutions to identify and report Financial Accounts held by residents of CD/Gibraltar to the HMRC. The UK-CD/Gibraltar Agreement is reciprocal, meaning that Financial Institutions based in CD/Gibraltar are required to identify and report Financial Accounts held by UK residents to the HMRC. FATCA will mostly affect clients who are treated as a US Person for US tax purposes and clients who have been identified as having links to the US, such as US nationality, place of birth in US, a US mailing address or a US telephone number. FATCA will also affect non-US entity clients who are substantially owned by US Persons. The UK-CD/Gibraltar tax agreement will affect those who are residents of The Crown Dependencies and Gibraltar. FATCA requires James Sharp & Co to identify accounts held directly or indirectly by US Persons and to report the relevant account information to the US Internal Revenue Services via HMRC. In order to ascertain clients’ US or non-US tax status, FATCA may require James Sharp & Co to collect additional information or documentation from clients. Where clients fail to provide the requested information or documentation, James Sharp & Co is required to apply a 30% US withholding tax on certain types of US source income paid to such clients. Similar information may be required for residents of The Crown Dependencies and Gibraltar to comply with UK-CD/Gibraltar tax agreements, including Date of Birth and UK National Insurance Number. James Sharp & Co is required to report information on certain account holders, including name, address, US Taxpayer Identification Number (if purely US FATCA based), account number, account balance to the HMRC. For US clients, the information will be passed on to the IRS via the HMRC. For a non-US entity substantially owned by US Persons, James Sharp & Co is required to also report information of the entity’s US owners. Information requirements for The Crown Dependencies and Gibraltar are outlined on the James Sharp & Co self-certification form, which will be required to be completed as part of the UKCD/Gibraltar agreement. 5 What is the consequence if clients do not provide the requested information or documentation to James Sharp & Co? 6 What types of information or documentation may James Sharp & Co request from clients? 7 How and where can clients get additional assistance regarding FATCA? James Sharp & Co may decline account opening applications or terminate services to such clients if the relevant information is not provided. James Sharp & Co may request clients to provide completed US tax forms (W-9 forms) to support the clients’ claim of their US tax status. For Crown Dependencies/Gibraltar residents, James Sharp & Co may request clients to provide a completed James Sharp & Co selfcertification form. Please note that James Sharp & Co is unable to offer tax advice. For tax related questions, clients should seek advice from professional tax advisors or refer to the IRS/HMRC website. Please Note: We will be writing to the relevant clients within the next month regarding US FATCA & The UK- Crown Dependencies/Gibraltar agreements.