We would like to remind our Investment Management clients of certain tax compliance obligations.
1. Personal Taxes. To avoid late payment penalties, individuals are required to pay their full U.S. federal income tax liability by April 15, 2019, even if the deadline to file personal income tax returns has been extended to October 15, 2019.
2. FBARs. A U.S. person generally is required to file FinCEN Form 114 (aka “FBAR”) with the U.S. Treasury Department to report the existence of a financial interest in, or signature authority over, financial accounts located outside the United States that had an aggregate value of more than $10,000 at any time during a calendar year (each, a “Foreign Account”).
To the extent a Delaware fund, an investment management company or a general partner (or their principals) maintains foreign financial accounts, including securities or brokerage accounts, such entity (or their principals) will generally need to file an FBAR reporting the account.
U.S. individuals who have signature authority over an offshore bank, brokerage or securities account are required to file a FBAR, even if they have no financial interest in such account, subject to certain exceptions.
FBARs are due April 15. However, this deadline is automatically extended to October 15 (without filing a request for extension).
3. FATCA and CRS. Offshore financial institutions are generally required to report on their U.S. taxable account holders and certain non-U.S. account holders. Cayman Islands master funds and Cayman Islands feeder funds must file FATCA reports by May 31, 2019. Cayman Islands financial institutions, including Cayman master funds and Cayman feeder funds, must file CRS notifications by April 30, 2019 and CRS reports by May 31, 2019 (subject to extension by the Cayman Islands Tax Information Authority).
For additional information on your tax compliance obligations, please contact Jonathan P. Brose (212-574-1615), James C. Cofer (212-574-1688), Ronald P. Cima (212-574-1471), Peter E. Pront (212-574-1221), Daniel C. Murphy (212-574-1210), or Brett R. Cotler (212-574-1269).