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FATCA Update

Guardian Wealth Management is calling on all US expats living abroad to be removed from the US Foreign Account Tax Compliance Act, after Switzerland became the latest country to comply with the Act.

Due to come into force on 1st July 2014, FATCA requires all non-US financial institutions to hand over information on US clients, either via national government or direct to the US tax authorities.

However, Guardian Wealth Management believes the requirements – originally intended to stop US residents hiding assets offshore – could prove harmful to legitimate US expats and jeopardise their savings and investment plans.

Gavin Pluck, Regional Head Europe, says: “While FATCA is being introduced to ensure US citizens don’t evade US tax, there’s no getting away from the fact it’s a pretty blunt instrument.

“In effect, it labels everyone as potential tax evaders when the majority of US expats have come abroad for career or family reasons.”

Guardian Wealth Management believes the solution is to remove the need for institutions to report on US clients living or working abroad. This would take away the administrative burden that is seeing an increasing number of non-US financial services firms close their doors on US expats.

Guardian Wealth Management says the unintended impact of FATCA means US expats have an ever-decreasing number of places to turn to for financial advice and a dwindling number of investment products to choose from.

As fears of investment restrictions and lack of financial advice grow, over a thousand Americans have already surrendered their passports to US embassies around the world so far this year, according to US Federal Register. With just a matter of months to go until the strictest tax reporting regime ever imposed on US expats is enacted, US expats on foreign soil need to start planning now to ensure their wealth ambitions and aspirations are not blown apart by the impact on investment plans.

Gavin says: “We at Guardian Wealth Management say to any US citizen considering chucking their passport ‘don’t!’” At least not without talking to us first. We have decided not to shut out its doors on US clients and we are trying to offer guidance and support.”

“We have in place a specialist service for American expats who want to prepare for the introduction of FATCA and map out a financial plan that will both protect and build their wealth for their family’s future.”

Guardian Wealth Management’s global teams are now actively welcoming those Americans who have been turned down by their own financial advisers.

“There are large numbers of American expats dotted across the world and we are seeking to support them with the necessary planning and preparation.”

More than seven million Americans have chosen to bid their country farewell and venture further afield. Of this number, there are over 125,000 US nationals living in the UK, a further 50,000 residing in the UAE and some 60,000 in Hong Kong.

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