Fidelity FundsNetwork, Skandia and Standard Life are the only major platforms to confirm they will continue to accept business from US taxpayers based in the UK as onerous new reporting requirements hamper advisers’ ability to place US business on platforms.
The US Foreign Account Tax Compliance Act 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 taxpayers from 30 June 2013.
The reporting requirements have led platforms to reassess whether they will continue to hold assets for existing US investors and whether they will accept new business from US taxpayers.
Fidelity, Skandia and Standard Life say they will accept business from US investors who live in the UK and meet the products’ terms and conditions.
Cofunds is not accepting any new business from US taxpayers. It is reviewing whether to continue to hold the assets of the 76 US clients currently on the platform.
Ascentric is not accepting US business, saying there is a lack of clarity around Fatca compliance. Transact has not yet made a decision and Novia and Aviva only deal with UK business.
Fidelity Worldwide Investment head of business development Ed Dymott says: “A lot of people have misunderstood the Fatca rules. I have heard platforms say they have checked they have no US residents so they will be ok, but that is not the case at all. Someone with a UK address, but classified as a US taxpayer, will still be required to report under Fatca, and that is where some of the complexity lies.”
Transact legal adviser Nick Francis says: “Whether we continue to maintain any US clients or whether we take on new US clients is something we are still deliberating on. We are looking at what is involved in identifying US persons and US accounts on the platform and whether we have the resources and staff to deal with that.”
Philip J Milton & Company managing director Philip Milton says: “The UK is supposed to be a global financial centre, but it seems if you are from the US the UK effectively closes its doors. It is a retrograde step for the industry not to be able to set up a system to facilitate the necessary reporting.”