It has been a busy few weeks for those following the implementation of the US FATCA regime – the new rules by which the US tax authority is seeking to prevent US taxpayers from avoiding their US tax obligations by moving money abroad. As we reported last year, "financial institutions", including private equity and venture capital fund managers, have been trying to work out how to prepare for the potentially enormous burden of FATCA compliance – with relatively little time, and very little finalised law to guide them. This has now changed: the UK and US governments have recently issued key regulations.

As is well known, in an attempt to deal with some very significant legal and practical difficulties for those affected by the US's FATCA rules, a series of "inter-governmental agreements" are being discussed between the US and national governments. In December, HMRC (the UK's tax authority) issued important draft UK regulations setting out how Britain plans to implement its intergovernmental agreement, along with a summary of responses to its earlier consultation. There is now a chance for interested parties to comment, and the private equity industry will have some very significant points to raise. The draft UK regulations and guidance set out how FATCA will apply to UK financial institutions, obliging such UK FIs to report details of "account holders" to HMRC; they crucially set out which entities are "UK" financial institutions for these purposes – and the draft rules currently need some work in this respect. Under the current draft UK regulations, it will be mandatory for UK financial institutions to report to HMRC.

And, whilst UK in origin, the importance of these draft rules should not be underestimated by those financial institutions (including funds) which are based outside the UK. HMRC is trailblazing here, and is in close contact with the other jurisdictions who are close to signing their own IGAs with the US. It is clear to all that in order to be effective and avoid duplicative reporting, the network of IGAs needs to work together as a whole. Given the advantages of a consistent approach to interpretation and implementation it is widely anticipated that other jurisdictions will look to HMRC's approach in implementing FATCA in their own jurisdictions. This makes it particularly important to identify and raise any points on which clarification or further guidance is needed at this stage, before the UK consultation process comes to a close.

Meanwhile, last week, the US Treasury Department and tax authority released the final form of the US FATCA Regulations – over 500 pages of detailed rules explaining how FATCA will operate in practice. These are of particular relevance to financial institutions in a jurisdiction where there are no plans to implement an IGA with the US. However, they are also the source of many of the key definitions used within the IGAs and local legislation implementing these, so are also a key piece in the jigsaw for those trying to ascertain their likely position under the IGA network. The final form US regulations are now helpfully more closely linked to the IGA system: of particular interest to the private equity community will be the conforming of the definitions relating to financial intuitions that are "investment entities".

The US has announced that it will operate an online FATCA portal whereby it is envisaged that all financial institutions (even those in IGA jurisdictions) will register and obtain a 'Global Intermediary Identification Number' for use in reporting and identifying their status to withholding agents. The portal will be accessible by no later than 15 July 2013 and the deadline for registration, in order to be included on the first electronic list of registered financial institutions (due to be published by the IRS on 2 December 2013), is 25 October 2013.

There is therefore only a short time for private equity and venture capital fund managers to work out which set of rules apply to them and prepare for registration. And although some uncertainties remain, there is now enough detail to start this planning in earnest.

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