Treasury quashes hopes of FATCA exemption for 'low risk' firms

Fewer financial institutions will be able to dodge the incoming FATCA rules, according to the latest agreement on the US tax regime.

In a clarification on the Foreign Account Tax Compliance Act (FATCA), HM Treasury said the only financial institutions exempt from the rules will be those which do not have to follow UK rules on money laundering. This means general insurers will not have to adhere to FATCA, and it is likely pension funds will also be exempt, but it offers no relief for asset managers who were hoping they might escape the regime. The hard line from the authorities comes despite lobbying from the Investment Management Association in recent months for a 'carve-out' in the rules for institutions deemed lo...