The Hiring Incentives to Restore Employment Act, signed into US law in March 2010, includes provisions generally known as FATCA. These provisions are intended to obtain information on assets held by US persons outside the US. To that end, FATCA requires financial institutions (which include UK funds) outside the US holding assets on behalf of US investors to report information to the US Internal Revenue Service (IRS).

Where a non-US financial institution invests directly or indirectly into the US, payments of US-source income (after 1 July 2014) and proceeds of sales of US property including stock in a US corporation (after 1 January 2017) will be subject to 30 per cent withholding tax unless the financial institution complies with the requirements of FATCA.

Regulations have been implemented in the UK to enable UK financial institutions to meet their FATCA obligations without entering into a direct agreement with the IRS…

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