HMRC has issued on its website revised guidance notes, draft regulations, and a Tax Information and Impact Note (TIIN) on the Foreign Accounts Tax Compliance Act (FATCA). The updated guidance notes outline when a trust can be defined as an ‘investment entity’ or not under the new rules.
Smith & Williamson partner Wilson Cotton, who is a member of the ICAEW Tax Faculty Private Client, Inheritance Tax and Trusts, and FATCA Committees, said: ‘The Guidance Note looks at the underlying assets and where the assets of a trust comprise a portfolio of professionally managed investments that brings it into scope. This will affect a lot of trusts where the trustees are individuals, including family members. My initial reading is that trusts which own interests in land, and in particular a share in a house occupied by a beneficiary, will be out of scope.’
HMRC has issued on its website revised guidance notes, draft regulations, and a Tax Information and Impact Note (TIIN) on the Foreign Accounts Tax Compliance Act (FATCA). The updated guidance notes outline when a trust can be defined as an ‘investment entity’ or not under the new rules.
Smith & Williamson partner Wilson Cotton, who is a member of the ICAEW Tax Faculty Private Client, Inheritance Tax and Trusts, and FATCA Committees, said: ‘The Guidance Note looks at the underlying assets and where the assets of a trust comprise a portfolio of professionally managed investments that brings it into scope. This will affect a lot of trusts where the trustees are individuals, including family members. My initial reading is that trusts which own interests in land, and in particular a share in a house occupied by a beneficiary, will be out of scope.’
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