The New Zealand Law Society says it is awaiting responses from the New Zealand Bankers' Association and Inland Revenue as to how FATCA requirements will affect moneys held in lawyers' trusts accounts.
The Law Society has been working with the Bankers' Association and IRD to clarify the situation with the US Foreign Account Tax Compliance Act (FATCA).
In a letter sent to law firm trust account supervisors on 19 April 2016, the Law Society said discussions had continued much longer than anticipated.
In an update on the situation at mid-June 2016, the Law Society says it is anticipated that the ultimate reporting regime for NFFE (Non-Financial Foreign Entity) law firms will be less onerous than at first contemplated by the Practice Briefing FATCA and New Zealand Law Firms.
The Practice Briefing notes that IRD guidance is expected "before mid-2015", but this is now dependent on advice from IRD.
The Law Society says in the meantime it is important that each law firm which has not already done so decides whether to elect to become a NFFE rather than to retain the status of "financial institution". Law firms can avoid this status by becoming NFFEs.