If you have money, assets and / or income abroad it very likely that in the future HMRC will get information about it which they can check with their records. In fact the UK now has legislation in place for automatic exchange of financial account information under four different regimes:
- The United States Foreign Account Tax Compliance Act – FATCA
- The Crown Dependencies and Gibraltar Regulations – CDOT
- The Common Reporting Standard developed by the OECD – CRS
- The EU Directive on Administrative Cooperation in Tax Matters – DAC
Whether the obligations are for the purposes of FATCA, the CDOT IGAs, the CRS or the DAC the basic process is the same.
Financial Institutions will capture and maintain information on the tax residence of Account Holders irrespective of whether or not that Account Holder is a Reportable Person for any given Reportable Period. This already applies for both the FATCA and CDOT regimes.
The due diligence procedures in each of the agreements governing automatic exchange are designed to identify accounts which are held by the residents of the jurisdictions with which the UK is committed to exchange information and visa versa. However, the number of these jurisdictions is not fixed and there is an expectation that under the CRS more jurisdictions will reach agreement with the UK over time. As a result, the regulations applying the due diligence rules have been designed to adopt a wider approach to recording the territory in which a person is tax resident irrespective of whether that territory is a Reportable Jurisdiction at the time that the Regulations come into force.
What will they do with this information? Quite simply they will put it into their powerful CONNECT database and cross check. There’s a good article in The Telegraph here.
What counties are involved
For more detail here’s a full list:
JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2017 (56)
Anguilla, Argentina, Barbados, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Dominica, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Montserrat, Netherlands, Niue, Norway, Poland, Portugal, Romania, San Marino, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Trinidad and Tobago, Turks and Caicos Islands, United Kingdom
JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2018 (41)
Albania, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, The Bahamas, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Ghana, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Marshall Islands, Macao (China), Malaysia, Monaco, New Zealand, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Turkey, United Arab Emirates, Uruguay JURISDI
You have been warned.