The United Kingdom Parliament has passed a set of amendments to the previously enacted International Tax Compliance Regulations of 2015. This legislation governs the responsibilities of British Financial Institutions to comply with both the FATCA and CRS reporting regimes.
These new regulations, which are scheduled to come into force on May 17, 2017, modify the scope of FATCA and CRS and grants HMRC information gathering powers. They also serve to clarify due diligence procedures, reporting requirements, and application of penalties.
The following amendments are particularly of note to FIs with CRS and FATCA obligations:
- The UK has amended its list of Reportable Jurisdictions in order to add the newer signatories to the MCAA.
- New participating jurisdictions have been added for the purpose of undertaking the wider approach to due diligence.
- Insurance contracts that were previously non-reportable will now be reportable under CRS.
- The obligation to obtain and retain tax residence information applies to all account holders – not just reportable account holders. Such information must be retained for five years from the date the information is last relied upon to support a decision not to report.
- The UK will now require FIs to include all preexisting accounts identified as reportable in their returns to HMRC – regardless of whether the accounts are still maintained or are closed. In the context of FATCA – this applies from calendar year 2016 and onward.
- HMRC will possess expanded information gathering powers in order to ensure compliance with the obligations set forth in the 2015 Regulations.
In the context of partnerships, trusts, and other entities – a partner or trustee will be liable for penalties in the event of noncompliance with the 2015 Regulations. For Collective Investment Vehicles, the manager or operator will also have penalty liability.
The post United Kingdom Enacts Amendments to International Tax Compliance Regulations appeared first on Sovos.
