SMSF compliance burden reduced following FATCA agreement

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Self-managed super funds (SMSFs) will no longer be subject to the United States’ Foreign Account Tax Compliance Act (FATCA), after Joe Hockey announced an intergovernmental agreement to reduce the burden on Australian financial institutions.

As a result of the agreement, Australian SMSFs with an American trustee or member will be exempt from the FATCA regime. Instead, Australia and the United States will enhance tax information-sharing arrangements, by automatically exchanging account information held by each other’s citizens.

According to the SMSF Professionals’ Association of Australia (SPAA), there will be considerable savings on costs for trustees and their advisers following this decision.

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