What are the U.S. Classification and Reporting Obligations for U.K. and Guernsey entities?

Mrs Sandra Mills a London based businesswoman who migrated recently to the U.S. to expand her business.  She or she is a grantor of a Guernsey Trust that owns a portfolio of non U.S. mutual funds.

Each of the mutual funds are classified as passive foreign investment companies under U.S. law.

In addition to filing a form 1040 Mrs Mills will need to file forms 3520 and 3520-A, and form 8621.

As outlined in Case Study 1 the penalties for failure to timely files these information returns can be substantial.