View more on these topics

Ernst & Young challenges platforms over Fatca stance

Daniel Hall Ernst & Young 200

Ernst & Young has questioned some platforms’ attitudes to complying with the US Foreign Account Tax Compliance Act, warning they have failed to understand its impact on their businesses.

Money Marketing revealed last week that just three big platforms – Fidelity FundsNetwork, Skandia and Standard Life – have said they will continue to accept business from US taxpayers based in the UK because of onerous reporting requirements under Fatca. This could curtail advisers’ ability to place US business on platforms.

Fatca aims to tackle tax evasion by US taxpayers through the use of foreign accounts. The rules require foreign financial institutions to report certain information about financial accounts held by US investors from 30 June 2013.

Cofunds and Ascentric are not accepting new business from US taxpayers. Transact has not yet made a decision and Novia and Aviva only deal with UK business.

But E&Y financial services advisory partner Dan Hall (pictured) says: “Just barring US investors will not help platforms escape the Fatca burden.”

Firms that do not comply with Fatca face a 30 per cent withholding tax on US assets. Hall explains even where platforms do not accept business or hold assets for US investors Fatca will require new account opening procedures and systems to flag potential US taxpayers, and if necessary firms will need to request further documentation.

He adds: “Platforms have obviously had a lot of pressures on them recently, particularly given the changes required under the retail distribution review. Our experience is most firms and platforms have been focused on those kinds of issues. With the first deadlines coming in to comply with Fatca next year, now is the time to start understanding the detailed requirements of what firms need to do.”

Tower Hill Associates director John Lang says: “The US jurisdiction seems to spread its tentacles in all sorts of directions. Advisers need to be on their guard and understand the repercussions of taking on US business.”


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Check the reports your platform produces. Some of you are needlessly suffering 30% dividend withholding already. Most US dividends I have seen on platforms have been wrong (dodgy Fx, wrong rate, wrong tax rate), late or both. If your platform is quoting 15% withholding it likely means they are certifying no underlying clients are US resident..have they actually checked? Ask your platform to describe what drives this 0,15 or 30% rate and you’ll get some differing answers too. Domicile? Incorporation? Don’t even get me started on Canadian or European withholdings…

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm