The Foreign Account Tax Compliance Act (“FATCA”) is a sweeping new U.S. compliance regime that went into effect on July 1, 2014. FATCA imposes a complex web of compliance obligations designed to make it difficult for U.S. persons to conceal assets offshore. However, FATCA has a much broader reach than just to U.S. persons—all non-U.S. financial institutions and investment vehicles must be aware of how FATCA applies to them.
FATCA requires financial institutions to collect a nonrefundable 30% withholding tax with respect to certain payments from U.S. sources. This withholding tax applies to Belize trusts with income predominantly from securities, no matter whether the trust has a U.S. settlor or any other U.S. persons connected to the trust. Belize trusts with income predominantly from securities can avoid the FATCA withholding tax only by becoming FATCA compliant. Additionally, many non-U.S. financial institutions will no longer maintain an account for a trust that is not FATCA compliant.
To assist Belize trusts for which we act as the trustee in becoming FATCA compliant in the most efficient and effective manner, we have created a new FATCA Sponsor Service. Our FATCA Sponsor Service is a complete FATCA solution for Belize trusts with income predominantly from securities—we perform all work necessary so that your Belize trust avoids the nonrefundable 30% FATCA withholding tax.
Please let us know if you would like more information about our FATCA Sponsor Service.