24 July 2012 7:12am

Australian banks need to get busy if they are going to make use of the grandfathering provisions contained in the US Foreign Account Tax Compliance Act, according to a senior tax lawyer.

FATCA’s grandfathering rules mean some deals will be outside the scope of the new law when it comes into force in 2014. There will be no withholding tax requirements on payments under obligations entered into before January 1 next year, as long as all material terms are settled.

Stephen Fiamma, a partner in the US tax practice of Allen & Overy, said Australian banks were "a bit behind the...