British Families Billed £500 – to Prevent Americans Dodging Tax
Draconian legislation enacted in America – and aimed solely at helping American authorities collect tax from their overseas citizens – is translating into bills of hundreds of pounds for ordinary British families.
The total cost to British businesses and individuals of abiding by the new US laws, which became effective here only last month, is put at £1bn. Most people will pay unknowingly through higher fees for their investments, banking and other services. But for some families the costs are more explicit. And the invoices are starting to land on their doormats.
The law, the “Foreign Account Tax Compliant Act” (or FATCA) was passed by US Congress in 2010, but it only applied in Britain from July 1. It requires financial institutions to undertake reviews on customers’ tax residency details, or face a 30% penalty on their US operations. Since most large financial organisations operating in Britain are global, they have no choice but to comply – whatever the cost.
Some individual customers are being contacted by their banks or other financial providers if, for example, they appear to have links with the US or own property there. But tens of thousands of other families are beginning to receive letters, and invoices, simply because they have established run-of-the-mill family trusts.
To understand the shocking real reason for FATCA see this article here.