2 1.3


AVOIDING CRS & FATCA REPORTING [ PETER COTORCEANU ]


A trust with, say, a US trust company as trustee, would be out of scope for GATCA. The same would be true of a trust with a US-resident individual as a trustee. Making such a trust not a US person, and therefore not subject to US tax on anything other than US-source income, is relatively easy. To be a US person, a trust must meet both the so-called ‘court’ and ‘control’ tests. The simplest of these tests to fail is the ‘control’ test: just give one non-US person control over one ‘substantial decision’ of a trust and – Hey Presto! – the trust is a non-US trust. For example, the control test will be flunked if a non-US-resident person (e.g. a protector) is given the power to make any one or more of the following decisions (this list is not exhaustive):


l Whether a receipt is allocable to income or principal


l Whether to terminate the trust l Whether to compromise, arbitrate, or abandon claims of the trust


l Whether to sue on behalf of the trust or to defend suits against the trust


l Whether to remove, add, or replace a trustee. FROM THE LONDON CONFERENCE, JUNE 2016


032


The ITPA Green Book 2017 www.itpa.org


It is playing a part in the US Presidential campaign.


HOW SHOULD MULTI-NATIONALS BE TAXED? [ DAVID GOLDBERG ]


.1


Nearly everyone, it seems, is angry about something: an awful lot of people are angry about the amount of tax Google has, supposedly, not paid in the United Kingdom. Some people are angry because companies with losses are not paying tax and others are angry because foreigners own homes here or because of what the banks did or didn’t do eight years ago. The anger is not limited to the UK: it has, plague-like, spread throughout theWest, where it has become an instrument of government and intergovernmental policy-making. It is playing a part in the US Presidential campaign, and it has even affected parts of the East. But, at least so far as tax is concerned, it seems to have affected us here, in the UK, rather more than in other


parts of the world. There is, here, a widespread general belief that multinationals have been getting away with, and have been allowed by the authorities to get away with, the financial equivalent of rape; and there has been no examination of whether that is or is not true.


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