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US Reporting Requirements

US taxpayers (including US citizens, US income tax residents or non-residents who elect to be treated as resident in order to file a joint tax return) may be required to comply with new reporting requirements in respect of assets they own outside the United States, beginning with income tax returns for the 2011 tax year - or face stiff penalties. In particular, if certain financial limits are met US taxpayers will need to report an interest in "Specified Foreign Financial Assets", which can include a beneficial interest in a foreign trust. 

These reporting requirements arise from the Foreign Account Tax Compliance Act (FACTA), in connection with which the IRS has recently released proposed regulations on the next major phase of implementation. These regulations provide guidance on issues relating to US account identification, information reporting, and withholding requirements for foreign financial institutions, other foreign entities, and US withholding agents. 

The US treasury has also announced a new information-exchange program with the UK, France, Germany, Italy, and Spain. 

If you are a US citizen or otherwise a US taxpayer with foreign assets (including UK assets) or an interest in a foreign (i.e. non-US) trust, you should seek urgent advice.

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Oxford
OX1 2BX

Telephone: +44 (0)20 7629 7411
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Bankside Office

240 Blackfriars Road
London
SE1 8NW
DX 53 Chancery Lane

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

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