This is a fairly standard Discounted Gift Trust holding a Bond, which paid the 5% withdrawals to the life assured, who has now died.
The trust was held on absolute terms from the outset (subject to the life assured’s right to the withdrawals), so a bare trust, for a large number of beneficiaries, one of whom now lives in the USA.
The 2 Trustees are lay people/family members.
The beneficiary in the US has asked the life assurance company to pay his share to his bank account in the US. The life assurance company has asked for the trust’s GIIN number before making payment to the beneficiary.
I had thought that trusts of this type did not need to register as a Financial Institution under FATCA. Does anyone have any experience they can share on this please?
A UK trust is usually a Passive NFFE for FATCA purposes, unless you have instructed an investment manager on a discretionary basis for 50% or more of the trust value at which point it will become a FI (usually owner-documented so no GIIN required) but it will depend what you declared when the DGT bond was set up. Also was a report made when the beneficiary left the UK to live in the US as it seems to have happened after the account was set up?
Thanks Karen, that was my understanding (although I do find a lot of the FATCA stuff quite impenetrable!).
I was not involved in the setting up of the DGT, which was also done before the introduction of FATCA. The trust’s only asset is an invesment bond that was purchased at inception. I thought that, although the investments inside the bond wrapper are being managed, this doesn’t count as being ‘managed’ for the purposes of FATCA.