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Filling a W8-benE, FFI or NFFE?
- Thread starter Daal
- Start date
Is your entity a home office, a personal investment company or a family trust that is not professionally managed by foreign financial institutions from the definition of foreign financial institution?
If this is the case, according to http://www.lexology.com/library/detail.aspx?g=ac79784c-1a87-401a-94d1-46e7fafbe075, I think your entity is a NFFE (my guess is passive NFFE).
If this is the case, according to http://www.lexology.com/library/detail.aspx?g=ac79784c-1a87-401a-94d1-46e7fafbe075, I think your entity is a NFFE (my guess is passive NFFE).
I'd go for NFFE, active or passive might deserve a deeper look into it, if you need to fill a w8ben e form through IB account management, select "active NFFE " and you will see more details on the conditions to be filled. You can switch back to passive NFFE before validating the form.
Not sure either active or passive brings more paperwork, talked to an IB rep and he reckoned they ended up pretty much the same.
Not sure either active or passive brings more paperwork, talked to an IB rep and he reckoned they ended up pretty much the same.
Active or passive is just a question of definition.
Page 10 of https://www.credit-suisse.com/media/production/pb/docs/uk/fatca-entity-classification-guide.pdf will give you the answer.
I think a family office or personal investment company earns mainly financial income (no turnover) which is qualified as passive income. Hence, the entity is a passive NFFE.
Page 10 of https://www.credit-suisse.com/media/production/pb/docs/uk/fatca-entity-classification-guide.pdf will give you the answer.
I think a family office or personal investment company earns mainly financial income (no turnover) which is qualified as passive income. Hence, the entity is a passive NFFE.
What do you mean by no turnover? an active stock trading company would still quality as a passive NFFE, no?Active or passive is just a question of definition.
Page 10 of https://www.credit-suisse.com/media/production/pb/docs/uk/fatca-entity-classification-guide.pdf will give you the answer.
I think a family office or personal investment company earns mainly financial income (no turnover) which is qualified as passive income. Hence, the entity is a passive NFFE.
Q1: By turnover I mean sales of goods or services.
Q2: Indeed
Q2: Indeed
I believe that you are an active NFFE if you earn more than 50% of your gross income from day trading (eg. see part XXV of the W-8BEN-E) - this would make logical sense. But don't ask me how do you know what your income is going to be before you make it.
You might like to look at my post from last year:
http://www.elitetrader.com/et/index...en-e-as-a-uk-company-section-5-status.292514/
Unfortunately the HMRC notes have been taken off line as they have been updated. This would make logical sense.
Thanks for the link confirming that "home office" companies are NFFEs.
I am struggling through this form with another broker again.
Does anybody know if it matters?
You might like to look at my post from last year:
http://www.elitetrader.com/et/index...en-e-as-a-uk-company-section-5-status.292514/
The next question is whether it is an Active or Passive NFFE. The best explanation of this I could find was on the Canadian Tax Authority's guidance note "Passive income is generally understood to include income from the mere holding of investment property, such as interest, dividends, and rent." (http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ntts-eng.html).
"Excluded from any calculation of Passive Income" is "in the case of an NFFE that regularly acts as a dealer in property described in item 6 above of this section (referring to the sale or exchange of property that gives rise to passive income), forward contracts, option contracts, or similar financial instruments (including notional principal contracts and all instruments referenced to commodities)" this is excluded from "passive income" (s2.6 of HMRC (UK Tax Aurthority) pp 20-21). So as long as I don't just watch my screens but regularly trade, my company is an Active NFFE.
"Excluded from any calculation of Passive Income" is "in the case of an NFFE that regularly acts as a dealer in property described in item 6 above of this section (referring to the sale or exchange of property that gives rise to passive income), forward contracts, option contracts, or similar financial instruments (including notional principal contracts and all instruments referenced to commodities)" this is excluded from "passive income" (s2.6 of HMRC (UK Tax Aurthority) pp 20-21). So as long as I don't just watch my screens but regularly trade, my company is an Active NFFE.
Unfortunately the HMRC notes have been taken off line as they have been updated. This would make logical sense.
Thanks for the link confirming that "home office" companies are NFFEs.
I am struggling through this form with another broker again.
Does anybody know if it matters?
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