FATCA exceptions agreed by Swiss and US authorities
Accounts held by the lawyers or notaries of clients in Switzerland are now exempt from the United States’ Foreign Account Tax Compliance Act (FATCA) following the signing of an agreement by the countries’ authorities in February.
The competent authorities of Switzerland and the US signed agreements on 19 February 2016 in Bern and on 29 February 2016 in Washington, which included an exception clause for accounts held by lawyers or notaries.
The negotiated exception clause has the advantage that clients no longer have to be identified, ensuring that the professional confidentiality of lawyers and notaries will be maintained under Swiss law.
Exceptions
As a result of the exception clause, accounts maintained for specific purposes by lawyers or notaries for their clients will be excluded from the scope of application of FATCA.
This includes, but is not limited to, accounts in connection with specific activities protected by law under professional confidentiality; such as assets relating to appending partition of inheritance or the pending separation of property in a divorce or separation.
The assets can only remain in the account for the duration of the legal proceedings.
Therefore, the financial institution maintaining the account will not have to identify the clients of lawyers or notaries, provided the lawyers or notaries confirm in writing to the financial institution that the accounts come under the scope of application of the exception clause.
Source: International Adviser
