Advisers to benefit from FATCA deal

As tipped by Good Returns, the government has announced it will look to negotiate a FATCA (Foreign Account Tax Compliance Act) tax information agreement with the United States.

The Act requires overseas financial institutions such as New Zealand banks, life insurers or managed funds to enter into agreements with the US’s Internal Revenue Service (IRS) and US Treasury to provide details about the affairs of their United States clients.

Without such an agreement New Zealand financial institutions could have 30% of income and sales proceeds from US assets withheld by the US Government.

If New Zealand succeeds in getting an agreement it will mean local institutions will have to share information with Inland Revenue rather than dealing directly with the IRS.