Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will have discussions with her US counterpart on the impact of the US Foreign Account Tax Compliance Act on the privacy rights of UK citizens who have US citizenship but have never resided in that country.

US law subjects all US citizens to US taxation, regardless of where they reside. This can include US citizens who were born in the US but who may have left at a young age and have few remaining ties with the country. US tax policy is a matter for the US, and it is not within the power of the UK government to change this.

In 2010, the US introduced the US Foreign Account Tax Compliance Act (FATCA) to combat tax evasion by US tax residents using foreign accounts. FATCA does not create new tax liabilities nor change the basis of US taxation; it is rather a reporting mechanism.

In September 2012, the UK Government signed an Intergovernmental Agreement (IGA) with the US to implement FATCA in the UK. As such, HMRC requires UK financial institutions to report information to HMRC on account holders who are US resident or US citizens and exchanges this information with the IRS annually. In return HMRC receives information about UK tax residents’ accounts in the US.

All of the information exchanged is covered by the secrecy provisions of the UK/US Double Taxation Convention.