Completing FATCA form, UK Ltd co contractor

[richy]

I filled in as "Passive non financial entity" then just my details, and the fact I'm not US citizen or US resident.

[seanraaron]

If you have kids, you may be doing it wrong.

Unless your income is pretty high, you are much better off, instead of the foreign income exclusion, claiming the foreign tax credit. Then, you are eligible to claim the refundable child tax credit. If you are going to have the hassle of filing all these forms, you might as well get paid a little bit for it, and $1000 per child per year is worth a little hassle.

You definitely need to look into whether or not you have to file FBAR.

The double taxation thing isn't bad, really. If you file 8832, then your corporation tax here counts towards the foreign tax credit, as does any personal income tax (think dividend tax). As a result, you probably won't pay any US tax. It's just a hassle.

My kid doesn't live with me full-time so not relevant. I don't have enough savings for the FBAR nonsense, but I probably will at some point, FFS. Might be time to think about handing in that passport after all!

[seanraaron]

Have you tried not being american?

My kid is triple national so I'd rather not be in a separate queue. And then there's the xenophobia in Europe rearing its head again which makes me feel like keeping a "get-out" passport handy. If they change the law there so there's no more dual nationalities then I'll hand in my library card.

[WordIsBond]

FBAR....I prefer to call it FUBAR

It's just possible you aren't the only one.

If you're a US citizen and a director of a foreign controlled corporation, you're basically in a world of hurt, and you need expert help (esp. w/ 5471 but, as you allude to, it's simpler for disregarded entities where the business and owner are treated as the same entity). Don't bother trying to talk to the IRS about any of this, you'll need a cross-border tax specialist.

Yes, but the UK tax savings may make it worth it even so. Certainly that's the case for me. And there are specialists, google David Treitel, for instance.

You don't have to be a US citizen, if you married one it can create a world of hassle for you anyway.

The correct procedure is this: 1) are you a US person? [if yes, go to 2, if no, go to 3]; 2) sorry, we can't be bothered to give you an account; 3) no FATCA needed.

Yep.

[WordIsBond]

Thankfully I don't have a limited co so I file my 1040 and the foreign income exclusion one and I'm covered. Although I'd like higher rate, the spectre of double taxation isn't a pleasant one. Makes me kind of hope the £ falls further against the US$.

If you have kids, you may be doing it wrong.

Unless your income is pretty high, you are much better off, instead of the foreign income exclusion, claiming the foreign tax credit. Then, you are eligible to claim the refundable child tax credit. If you are going to have the hassle of filing all these forms, you might as well get paid a little bit for it, and $1000 per child per year is worth a little hassle.

You definitely need to look into whether or not you have to file FBAR.

The double taxation thing isn't bad, really. If you file 8832, then your corporation tax here counts towards the foreign tax credit, as does any personal income tax (think dividend tax). As a result, you probably won't pay any US tax. It's just a hassle.

[jamesbrown]

LOL. FATCA forms are a piece of cake by comparison. Basically, they just want to know if you are a US person so they can do the required reporting to the US government about your accounts. More and more banks are just refusing to give accounts to US persons, though.

If you have to file 1040, you also should be filing FBAR. Starting last year, you should have filed 8965. And if you or your spouse or any shareholder in your limited company have to file 1040, then it gets pretty complicated. You are supposed to file 5471, the single worst US form, every year. However, you can probably file 8832 (once, not a big deal). If your company is owned by you, or you and your wife (and you file joint in the US), then after filing 8832 you can probably just file on Sched C, self-employment. If you have more shareholders, then you have to file as a partnership.

FBAR....I prefer to call it FUBAR

If you're a US citizen and a director of a foreign controlled corporation, you're basically in a world of hurt, and you need expert help (esp. w/ 5471 but, as you allude to, it's simpler for disregarded entities where the business and owner are treated as the same entity). Don't bother trying to talk to the IRS about any of this, you'll need a cross-border tax specialist.

However, it sounds as though you're just a regular UK contractor and the bank is taking a belt-and-braces (read: wrong) approach and asking you to file an irrelevant (for you) form. The correct procedure is this: 1) are you a US person? [if yes, go to 2, if no, go to 3]; 2) sorry, we can't be bothered to give you an account; 3) no FATCA needed.

[FrontEnder]

Thankfully I don't have a limited co so I file my 1040 and the foreign income exclusion one and I'm covered. Although I'd like higher rate, the spectre of double taxation isn't a pleasant one. Makes me kind of hope the £ falls further against the US$.

Have you tried not being american?

[seanraaron]

LOL. FATCA forms are a piece of cake by comparison. Basically, they just want to know if you are a US person so they can do the required reporting to the US government about your accounts. More and more banks are just refusing to give accounts to US persons, though.

If you have to file 1040, you also should be filing FBAR. Starting last year, you should have filed 8965. And if you or your spouse or any shareholder in your limited company have to file 1040, then it gets pretty complicated. You are supposed to file 5471, the single worst US form, every year. However, you can probably file 8832 (once, not a big deal). If your company is owned by you, or you and your wife (and you file joint in the US), then after filing 8832 you can probably just file on Sched C, self-employment. If you have more shareholders, then you have to file as a partnership.

Thankfully I don't have a limited co so I file my 1040 and the foreign income exclusion one and I'm covered. Although I'd like higher rate, the spectre of double taxation isn't a pleasant one. Makes me kind of hope the £ falls further against the US$.

[WordIsBond]

Well that pretty much ends any notion I might have had to have a limited co. in future. It's bad enough having to file a 1040 every year without having to do that as well.

LOL. FATCA forms are a piece of cake by comparison. Basically, they just want to know if you are a US person so they can do the required reporting to the US government about your accounts. More and more banks are just refusing to give accounts to US persons, though.

If you have to file 1040, you also should be filing FBAR. Starting last year, you should have filed 8965. And if you or your spouse or any shareholder in your limited company have to file 1040, then it gets pretty complicated. You are supposed to file 5471, the single worst US form, every year. However, you can probably file 8832 (once, not a big deal). If your company is owned by you, or you and your wife (and you file joint in the US), then after filing 8832 you can probably just file on Sched C, self-employment. If you have more shareholders, then you have to file as a partnership.

[seanraaron]

I worked on a project to implement FATCA compliance back when I was a permie.

It should only apply to US citizens or those eligible to pay tax in the USA.

If you are, you basically have to pay tax on earnings you make in another country. If not, it shouldn't affect you.

Well that pretty much ends any notion I might have had to have a limited co. in future. It's bad enough having to file a 1040 every year without having to do that as well.

[richy]

One of our clients was recently asked to complete this. They confirmed to us they were not a US citizen, nor did they have any trade with the US.

They asked their bank why/how they had to complete the form. The bank said they couldn't answer, only the business's tax adviser could (aka us).

Complete load of BS if you ask me, but between us and the client we made a stab at answering each question. Never heard anymore, so assume the bank was happy enough with the answers.

Thank you. I will fill it in as exempt. Its a hard form to understand. I'm not a financial institution!

Secure Trust are pretty useless, they send me the same FSCS form to fill in annually as well.

[Maslins]

One of our clients was recently asked to complete this. They confirmed to us they were not a US citizen, nor did they have any trade with the US.

They asked their bank why/how they had to complete the form. The bank said they couldn't answer, only the business's tax adviser could (aka us).

Complete load of BS if you ask me, but between us and the client we made a stab at answering each question. Never heard anymore, so assume the bank was happy enough with the answers.

[FrontEnder]

I worked on a project to implement FATCA compliance back when I was a permie.

It should only apply to US citizens or those eligible to pay tax in the USA.

If you are, you basically have to pay tax on earnings you make in another country. If not, it shouldn't affect you.

[richy]

Hi all
My deposit account with Secure Trust just sent me a FATCA self-certification form (its some sort of compliance, they need to provide to USA to confirm who owns bank accounts).

Has anyone else completed such a form?

I was thinking to sign as "exempt beneficial owner". Any tips appreciated.
Rich