rita2012

Hi Everyone,

I was wondering if someone can help me with their advice on Foreign Account Tax Compliance Act (FATCA), which I noticed a few people have provided their valuable comments but I was unsure how this new rules affects someone in my situation...

My personal scenario is as follows: I have joint account with my parents in the UK with approx $240K in total in a British bank account. This is actually my parents savings, however, since my name is jointly with theirs for this amount hence $120K, at least on paper, is considered as mine on which I paid my US taxes on any interest I earned as well as lawfully reported this to FBAR in 2011. I am currently living in the US but am likely to be immigrating to the UK for family reasons sometime this year.

I will be, like last year, declaring the income earned on this account as well as report foreign bank account details via FBAR to the IRS but totally unsure about FATCA.

My question is: How does FATCA affects someone in my situation who is currently in the US but am immigrating to the UK this year?

I would appreciate any advice someone may provide. Thank you

manny1980

Although this may not answer your question, this may at least give you some information on FATCA.

http://britishexpats.com/forum/showthread.php?t=697575

Its seems like not many are either aware or have complete understanding of FATCA and the requirements, which kind of make sense considering the IRS already has FBAR implemented and this, in addition, makes tax issues for US citizens in the US or abroad more complicated.

Although, to the best of my knowledge, how things currently stand is that FATCA will not be enforced until end of 2012. So most likely you just have to report your income earned abroad as well as any banks you have abroad to FBAR with over $10K.

robin1234

I had assumed that we'd have to start reporting foreign bank accounts (if over the limits specified in the Form 8938 Instructions) on Form 8938 starting with 2011 tax submissions. Apparently the requirement has been postponed until the IRS releases Form 8938 in its final form. At this point, I'm not sure if Form 8938 has been officially released or not. Certainly, when I looked at the form online a month or so ago, it was marked "draft." Now, it is not so marked and seems to be an actual form.. so still not sure if we have to submit it for 2011.

manny1980

So form 8938 is another form to fill for US citizens with assets abroad?

Does this imply that US citizens with foreign assests are required to fill in 3 forms every year:

1. FBAR
2. FATCA (Whatever this is)
3. Form 8938

All above three forms have different financial threshold requirements.

Grrr...why Govt has to make things so complicated is beyond my understanding. I can only assume that the Govt is desperate to pinch any extra penny they can get because of their deficit levels.

robin1234

No, no... Form 8938 is the FATCA form for individuals. Obviously, the more onerous and controversial aspects of FATCA are the new requirements that Banks and other financial institutions will have to comply with, meaning that US citizens may (in future) not be able to do business with banks that do not wish to incur the further expense of FATCA compliance.

Anyway, I just called the IRS and the agent I spoke to confirmed that the Form 8938 is in place and it is required for 2011.

So, if you live in the US and have $50,000 or more ($100,000 or more if married filing jointly) in a foreign bank account or accounts, you have to file Form 8938 for 2011. That is in addition to the Treasury Form TD F 90-22.1, which has a lower $$ threshold.

There is a large & punitive penalty for not filing, so better do it!!

manny1980

To be honest this sounds so ridiculous because submitting the FBAR form itself is declaring what an individual has abroad hence what is the need for the additional FATCA?

Its kind of like reporting the same information twice.

rita2012

This is valuable information, thank you for calling the IRS for this.

I assume since I am currently in the US I will have to submit this 8938 form as I have over 50K abroad. What are my liabilities with this form, if any, if I am already lawfully reporting income earned on this money in an overseas bank?

But would I still be required to file this next year when I will be living in the UK?

nun

Everything you need to know is here

http://www.irs.gov/businesses/corpor...251217,00.html

paulpur

lol i dont think i will ever need to worry about that form, says for me and my wife, if living abroad, that we only need to do it if we have over $400k at the end of the year or $600k at any time throughout the year

robin1234

Rita2012, as far as I can see it is just reporting, no extra tax to pay over & above what you probably already list out and pay tax on via Form 1040 Schedule B or similar. As for whether one has to continue to fill out Form 8938 when resident in the UK, I think you do if you are a US Citizen. According to the crib sheet linked to by Nun, you are a "specified individual" if you are a US Citizen.

nun

Whether you have to fill out the FATCA form will also depend on your account balances during and at the end of the year. If you are in the UK those are relatively generous