Results of Deloitte’s FATCA Fiduciary Survey show that the local fiduciary industry is rising to the challenge of the Foreign Account Tax Compliance Act (FATCA) regime.
More than 40 businesses across the three Crown dependencies responded to the survey, with 78% of respondents saying they have completed their FATCA classification and only ten per cent reporting that their internal entities are not yet registered with the IRS.
Confidence in FATCA compliance is high within the islands, with 66% of those surveyed saying they are "very confident" or just below in relation to the FATCA compliance of their onboarding procedures. However there is still some way to go for most companies in terms of preparation for FATCA reporting commencing in 2015, with only 22% saying they are well prepared. Most companies say they will be undertaking pre-existing account searches during the next nine months.
In all, 78% of respondents say they will be offering their trust company GIIN to client trusts through the trustee documented trust regimes in all or most cases. The majority will also be acting as sponsor to client structures through the sponsoring entity regime.
Looking ahead to the Common Reporting Standard regime, it is clear that this presents the next challenge. Only 5% of respondents have considered the impact in detail but 68% of those surveyed expect OECD Common Reporting Standard (“CRS”) to have some or even significant impact.
The overriding theme that emerges from the survey is the amount of work that the FATCA regime entails for the fiduciary industry, both in terms of the large volume of work undertaken to date as well as the remaining tasks required over the coming months on reporting, due diligence and CRS in due course.
Deloitte is providing FATCA assistance to a large number of local trust companies, fiduciary businesses and financial service providers, offering practical support to help organisations take the required steps and strategic decisions to become FATCA compliant. Deloitte undertook the survey to provide an industry snapshot so that local service providers can compare their own approach towards FATCA with that of their peers.
“The results of this survey indicate that the local fiduciary industry as a whole is rising to this challenge and local trust companies appear to be moving in the right direction,” says Jo Huxtable, a partner at Deloitte in Guernsey. “FATCA is however a complex regime and with the introduction of CRS, it is expanding in scope. The many anecdotal comments we heard showcase some frustrations with the evolving nature of the regime; the need to deal with various commercial challenges and a determination on the part of those involved to get it right. It is very clear that progress is being made, but inevitably there is plenty more work to be done.”
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