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FATCA reports for nil returns no longer required

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The US Internal Revenue Service (IRS) has confirmed, in FAQs, that only direct reporting non-financial foreign entities (NFFEs) are required to submit nil reports for FATCA. The Law Society has stated that HMRC will amend its FATCA regulations to ensure consistency with the new IRS requirements, with the new rules likely to come into effect by the end of April 2015. The US/UK inter-governmental agreement (IGA) provides that all UK resident entities (including NFFEs) are not direct reporting NFFEs and therefore UK taxpayers will no longer be required to submit nil returns for FATCA. It should be expected that this position will be maintained in the new regulations, due to be published following the Budget, that will implement the common reporting standard (CRS) and DAC in the UK, and consolidate the rules with the obligations under the existing regulations that implement the IGA (which will be repealed).