Sana Sheikh, Associate Solicitor at GSC Solicitors reports on the developments and details of The Common Reporting Standard.

The Common Reporting Standard (CRS) calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It is an OECD initiative as part of the global drive for transparency and accountability in the fight against tax evasion.

1. When will it be adopted?

101 countries have so far signalled their intention to adopt the CRS. The first exchange of information will take place by September 2017, with all countries exchanging information by September 2018. The UK is one of over 50 jurisdictions having committed to being ‘early adopters’ to implement the first automatic information exchanges in 2017

2. What information needs to be reported?

Financial institutions are required to identify customers who appear to be overseas tax residents and exchange information with the government of the relevant country in which the account holder is resident.

The information to be exchanged under the CRS includes the following:

1. 1. personal data of the account holder including name, address, date of birth, jurisdiction of tax residence and taxpayer identification number;
2. 2. interest and dividends;
3. 3. account balances or values;
4. 4. investment income (including investments held through overseas structures); and
5. 5. income from certain insurance products.

3. In respect of trust accounts…

It is important to note that trust accounts are reportable under the CRS. Trusts may be obliged to report information in relation to their beneficiaries, settlors, protectors and trustees. In certain instances, this may include the value of settlors’ and beneficiaries’ interests.

The CRS will enable HMRC to receive more information than ever before about the offshore investments of UK taxpayers. HMRC are already using its ‘Connect’ intelligence tool in all cases which matches and interrogates bulk data to identify tax irregularities.

For more information or to discuss how the CRS may impact you or your business further, please contact GSC Solicitors on +44 (0)207 822 2222 

www.gscsolicitors.com