HMRC has issued guidance on how it will treat holding companies and treasury companies for the purposes of the UK’s agreements on FATCA and automatic exchange of financial information, following the announcement in March that such companies no longer come within the definition of foreign financial institution under the US regulations. UK financial groups may need to review the status of holding companies and treasury centres in light of this update.
The guidance explains the background to the removal of ‘relevant holding companies’ and ‘treasury companies’ from the definition of UK financial institutions (UKFI) and outlines the approach to determining an entity’s status. Under the guidance, an entity will be a UKFI where the activities carried out in its name are the activities of a UKFI or where there is a benefit in classifying it as a UKFI. Where an entity is not a UKFI it will be a non-financial foreign entity (NFFE).
HMRC has issued guidance on how it will treat holding companies and treasury companies for the purposes of the UK’s agreements on FATCA and automatic exchange of financial information, following the announcement in March that such companies no longer come within the definition of foreign financial institution under the US regulations. UK financial groups may need to review the status of holding companies and treasury centres in light of this update.
The guidance explains the background to the removal of ‘relevant holding companies’ and ‘treasury companies’ from the definition of UK financial institutions (UKFI) and outlines the approach to determining an entity’s status. Under the guidance, an entity will be a UKFI where the activities carried out in its name are the activities of a UKFI or where there is a benefit in classifying it as a UKFI. Where an entity is not a UKFI it will be a non-financial foreign entity (NFFE).
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