As part of the Hiring Incentives to Restore Employment Act, the US government enacted the Foreign Account Tax Compliance Act (FATCA) in 2010. FATCA imposes due diligence, information reporting and control burdens on a range of non-US financial intermediaries and investment entities (foreign financial institutions, or FFIs), including banks, other financial institutions, certain insurance companies, investment funds and other collective investment vehicles.
FFIs will be required to disclose the name, address and taxpayer identification number of certain US persons that have investments in offshore financial institutions or own, directly or indirectly, an interest in an investment fund, and certain additional information relating to any such interest. If an FFI fails to register with the IRS or to comply with the reporting obligations, then a 30 per cent withholding tax will be imposed on payments to the FFI of US source income and proceeds from the sale of property that could give rise to US source interest or dividends.
Implementation of the withholding tax provisions was set for 1 January 2014 (1 January 2017 in the case of proceeds from the sale of property) but was recently postponed. 1 July 2014 is now the operative date on which FATCA withholding begins, new account opening procedures must be implemented and foreign financial institutions must be registered. Grandfathered obligations will include obligations outstanding on 30 June 2014…
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Cayman Islands Law Update: the Exempted Limited Partnership Bill and the Contracts (Rights of Third Parties) Bill
Following extensive consultation in both the public and private sectors, the Exempted Limited Partnership Bill 2014 was gazetted on 21 February 2014.
The court looked at the issue of whether a stranger to a trust, who dishonestly assists in a breach of trust, is a ‘trustee’ within the meaning of s21(1)(a) of the UK Limitation Act 1980.