United Kingdom

Impact of FATCA on UK Insurers 

The faint hopes that UK insurance groups may be excluded from the FATCA regime have been dashed with the release, by the IRS on 8 February 2012, of the much awaited proposed regulations.  The FATCA challenge will remain a significant and complex one for the insurance industry with many products still within scope; but there are nevertheless reasons to be positive.
FATCA
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Contacts

Tom Aston
UK FATCA Tax Lead tom.aston@kpmg.co.uk

+44 (0) 20 7311 5811


Jeanette Cook
Senior Manager Tax jeanette.cook@kpmg.co.uk
+44 (0) 11 7905 4277

The potential agreement between HMRC and the IRS is very welcome, but the time for waiting to see what might happen appears to be over. Whilst lobbying is still possible, comments on the regulations are due to the IRS by 30 April 2012, the aim now should be to:

 

  • Prioritise the identification of products triggering FFI status or requiring back book due diligence;
  • Consider what procedures are needed to support the FATCA CCO sign-off; and
  • Complete and remediate a gap analysis on the new customer take-on procedures. 


The hard truth is that FATCA style inter-governmental exchange of information is here to stay for UK insurance groups. With the OECD TRACE project, which requires a global sharing of information, and the EU Savings Directive rearing its head again, FATCA may only be the beginning.


KPMG will continue to share its views with the IRS on the implications of FATCA on the UK insurance industry. Should you have any questions on how your business might be affected, or require assistance with your FATCA project, please contact your usual KPMG contact or one of our subject matter experts.

 

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