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FATCA overview

There are a number of substantial changes being made by financial regulators, governments and banks to ensure the protection and long-term safety of both the financial system and our clients’ interests.

One of these regulations is the Foreign Account Tax Compliance Act (FATCA), effective as of 1 July 2014. This legislation administered by the United States government encourages better tax compliance by preventing US persons from using non-US financial organisations and foreign entities to avoid US taxation on their income and assets.

Impact to HSBC Private Bank and our clients

HSBC is proud of our commitment to becoming fully FATCA compliant in all countries where we operate. Other banks and financial organisations will also be affected. However, their approach to adopting FATCA may differ to that of HSBC.

A significant number of countries worldwide where HSBC Global Private Bank operate have already signed or are expected to sign Inter-governmental Agreements (IGAs) (see glossary) to facilitate FATCA compliance with the United States government. These IGAs will result in the FATCA legislation becoming part of these countries’ local laws.

This legislation will affect each individual and entity Private Banking clients differently. It will depend on factors such as the type of account you hold with HSBC, the type of policy agreement you have with HSBC, or which countries you trade in, to name a few.

If you are a client of an HSBC Private Bank Trust Company, the trustee will take responsibility for FATCA compliance of the trust due to its fiduciary responsibilities to the beneficiaries of the trust or beneficial owners of the administered entity.

The application of the FATCA rules mean that in many cases a trust is treated as a Foreign Financial Institution (FFI) (see glossary) in its own right and the responsibilities for the due diligence classification and documentation, and reporting will remain with the trust but the trustee will in practice assume responsibility for carrying out FATCA compliance requirements and providing the appropriate FATCA documentation to banks and investment managers or custodians with which the trust holds accounts.

We closely monitor updates or changes to the FATCA legislation in order to identify any potential impact to our Private Banking clients and understand where we need to report information to the IRS or local tax authority. We may contact you to request further information or documentation in order to verify your tax status under FATCA.

Additional information

IRS W forms and customer guidance

The US Internal Revenue Service (IRS) website provides IRS W forms, including instructions on how to complete them.

W-9 form: This is the withholding certificate referred to as a ‘W-9’ on the IRS website. This form is completed to confirm US tax status.

W-8 forms: This is a link to the withholding certificates referred to as ‘W-8s’ on the IRS website. This is a series of forms that are completed to confirm non-US tax status.

In order to provide customers with further support when completing IRS W forms, we have provided some additional customer guidance for the forms W-9, W-8BEN and W-8BEN-E.

Withholding statements

Withholding statements: A range of Withholding Statements have been produced, which can be used when providing a Form W-8IMY, as well as additional customer guidance on how to use these.

(Page last updated November 2014)