FACTA for child investments

So, what is the advantage of being a Deemed Compliant Institution if they have US Persons as account holders?

Expatriation is looking less and less ridiculous. Although Lloyds TSB doesn't seem to have any issues with US citizens, and it is upfront about sharing your details.

23.   Tax reporting and withholding for customers who are subject to the tax regime of certain other countries (including the US)
23.1   We (or other companies in the Lloyds Banking Group) may be required by legislation or by agreement with tax authorities to report certain information about you and your relationship with us, including information about your accounts:
(a) tothetaxauthoritiesintheUK,whichmaythenpassthatinformationtothetaxauthoritiesinanothercountrywhere you may be subject to tax; or
(b) directlytothetaxauthoritiesinothercountries(suchastheUS)wherewereasonablythinkorarerequiredtopresume you are subject to tax.
23.2   Where we are required to report information about you and/or your relationship with us, including information about your accounts, this information includes (but is not limited to) the account number, the amount of interest paid or credited to the account, the account balance or value, your name, address, country of residence and social security number or taxpayer identification number. In addition, we may need you to provide us with further information, documents or certifications about your identity, tax residence, nationality and status.
23.3   If we are required to report information about your accounts, you agree that:
(a) youwillprovideadditionalinformationordocumentswen eedfromyouandthatconfidentialityrightsunderapplic able data protection, bank secrecy or similar laws will not apply to information we report or obtain from you to comply with our obligations;
(b) ifyoudonotprovideuswithinformationordocumentswene ed,wemay(i)applyawithholdingtaxtoamounts, including interest, we pay to you; or (ii) close your account; or (iii) transfer the account to an affiliate in another jurisdiction; and
(c)   we will not be liable to you for any loss you may suffer as a result of our complying with legislation or agreements with tax authorities in accordance with this condition, unless that loss is caused by our gross negligence, wilful default or fraud.

It's very confusing. The actual text of the IGA indicates "the Financial Institution does not provide accounts to (i) any Specified U.S. Person who is not a resident of the United Kingdom...". Obviously aimed at the US resident who has an account with the building society. The consultation paper stops at "any Specified US Person". Two entirely different scenarios. Which to believe,......or maybe neither at this time.

Enjoyed this part of your copy of the Lloyds info:

"this information includes (but is not limited to)".

Standard wording, and similar to HSBC. Hopefully, they will report whether I'm alive or dead. That way, I may not have to fill out the yearly form to Social Security.

I really don't understand legalese....if my son who has dual citizen ship has a bank account with £500 in it...does he need to tell the bank? Or is there a minimum before you need to do this?
and do child trust funds then count like ISA's and they're exempt?
honestly, we don't earn enough to justify the accounting fees this is all bringing down!

I really don't understand legalese....if my son who has dual citizen ship has a bank account with £500 in it...does he need to tell the bank? Or is there a minimum before you need to do this?
and do child trust funds then count like ISA's and they're exempt?
honestly, we don't earn enough to justify the accounting fees this is all bringing down!

Your son will need to file an FBAR if the account ever goes above $10k and will have to file US taxes and declare any UK interest income when he meets the filing requirements.

ISAs are not US tax exempt.....any trust funds will also have to be dealt with for US tax purposes

If a US person has signature over the son's accoun this is reported on the parents FBAR.

Child trust funds may require filing of annual US trust returns. ISAs are not tax exempt in the US.

Check out this FATCA Webinar [nofollow] . It addresses several of the issues discussed in this thread that are relevant to American expat financial planning.

Also, with FATCA, there will be increased scrutiny with PFIC reporting requirements. Americans in the UK might also be interested in this article: Americans in the UK Need to Avoid this Catch-22 Investment Trap [nofollow]

We have not yet had the pre-Budget report as this is nearly a month away nor will we have the 2013 Finance Bill in draft until Spring of 2013.  HMRCs period for consulation on the IGA (inter governmental agreeement) is only closing this month.

None of the proposed changes affect US domestic law obligations of US persons.

The taxation of a child or parent(s) resident in the UK  will depend on the domicile of either the child or the parent(s) and whether the investments held for that child are both US and UK compliant.