The CRS is the OECD’s global standard for the automatic exchange of financial account information between governments. It is part of the current global drive for tax and financial transparency and accountability. More than 51 jurisdictions (including the UK) have agreed to early adoption.
The CRS initiative is implemented on an EU wide basis through the recently revised Council Directive on Administrative Cooperation (‘DAC’). It is envisaged that information will be exchanged with non-EU jurisdictions under bilateral CRS Competent Authority Agreements.
The UK has implemented CRS and DAC. This provides the legal basis for UK financial institutions to collect and provide to HMRC the data required under CRS and DAC. UK financial institutions are to start the necessary client due diligence from 2016 and provide required client information to HMRC from 2017.
Financial institutions will have to update and amend existing client due diligence and new client on-boarding procedures by 2016 and start reporting to HMRC in 2017. Likewise FATCA, the definition of financial institutions for CRS is extremely wide.
Anyone with overseas assets could be affected, especially individuals with undisclosed overseas assets or in relation to overseas assets. Tax authorities will be provided details of these assets through CRS reporting.
The following details will be exchanged among tax authorities in relation to affected individuals:
- name, address, date of birth, National Insurance number (and name and address of entity, if relevant);
- account number and details of financial institution;
- annually, the account balance or value, the total gross amount of funds paid or credited to the account (i.e. income) and the aggregate of any sale or redemption of assets.
The STAGE AT software allows the submission of the CRS-DAC2 yearly report by the 30th of April of the following year. SEFIN is also a direct access point to SID network necessary for the final transmission of the file.