MIKE COADY

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Mike Coady was appointed Chief Executive Officer of swissglobal in 2018, a position to which he brings a strong financial background and experience across a variety of roles. Mike is a skilled business strategy and growth leader, coach and motivator. He is a people’s person known for his ability to inspire teams towards excellence. He mentors his people and departments to transform their passion into outstanding results and long-lasting relationships with their clients.
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US expats look out… FATCA’s on its way…

Mike CoadyExpat Advice US expats look out… FATCA’s on its way…

US expats look out… FATCA’s on its way…

In little under four months’ time, the highly controversial Foreign Account Tax Compliance Act (FATCA) will be implemented in the U.S.

Described by critics as ‘the worst law most Americans have never heard of’, FATCA will require every foreign financial institution (FFI) all over the world to report every single American client’s financial activities to the Internal Revenue Service.  If they fail to do this, FFIs could be hit with hefty fines.

But it is American expatriates who, arguably, are hit the most by this new legislation.  Just the logistics of not being unable to bank in their chosen country of residence, as the burden of FATCA compliance is just too arduous for banks to welcome their custom, will have a confounding effect.  U.S. expats are the ones who are victimised by FATCA.

Purportedly designed as a way to combat global tax evasion, FATCA campaigners have stated that the U.S. government hopes to recover some $100 billion in tax when the law comes into effect.  Washington has been working hard to convince all international governments to sign an intergovernmental agreement (IGA), meaning every FFI within that country would be obligated to directly report to the IRS.

However, even though the U.S. government is offering the world’s governments reciprocity, in reality, this is an impossible promise to keep.  Which is why there have been delays in countries signing IGAs.

As well as infringing on countries’ sovereignty rights and people’s privacy, FATCA will, in my opinion, do little if anything to reduce or even eradicate tax evasion.  The overwhelming majority of Americans will not be hiding anything from the IRS, but the fact that every piece of information on these people must be officially reported, whether or not any tax is owed, makes the law extremely ineffective and exceptionally costly to undertake.

FATCA fuels passport relinquishments

deVere Group carried out a survey at the end of last year, with some 400 American expat clients asked about their opinions on relinquishing their U.S. citizenship as a direct result of FATCA.

According to the survey, 68 per cent responded they had ‘actively considered it’, ‘are thinking about it,’ or ‘have explored the options of it.’

Speaking about the results, deVere Group’s founder and chief executive, Nigel Green, said: “This is a staggeringly high figure.  However, I am not too surprised as it is our experience that Americans – at home and abroad – are becoming increasingly aware of the far-reaching, unintended adverse effects of FATCA.”

Surrendering citizenship is an incredibly difficult step for most American expats to take.  As the roll-out date gets ever closer, it’s now more important than ever to consult a financial adviser about the options available.  deVere group has devised a series of solutions for our American expatriate clients to combat FATCA.  One solution to consider is a tax-qualifying pension contract, which will allow the client to save money, as well as be exempt from tax each year on investments within the pension.

However, due to the intricacies within FATCA, it is absolutely essential to seek advice from a professional in this subject in order to lessen the adverse effects of this highly contentious law.

The FATCA time bomb is ticking.  The time to take action is now.

Mike CoadyMike Coady
Mike Coady
Comment
  • beth thomas

    lets start by taking a copy of the FATCA regulations and sticking them up the ass of every IRS employee starting with Jack Lew, every congressmen who voted for it, then every prime minister of every country who accepted this disgrace. What a sham. They have thrown every US expat under a bus and just dont give a shit .

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