All existing real estate and infrastructure funds with exposure to US assets (directly, indirectly or through affiliated entities) should consider how FATCA will impact their business.
- To date, FATCA is something few Australian real estate funds and investors have had to consider.
- FATCA is a new US withholding regime that will impose a punitive 30 percent withholding from certain US source income, including income from Real Estate.
- Whilst FATCA is a US anti-avoidance measure designed to catch US investors not disclosing US source income they have earned via offshore funds and entities, its impact is so far-reaching that it may affect non-US investors also.
- There are a number of potential issues that FATCA may uncover and which may require consideration before FATCA goes "live".