[New post] [New post] [New post] Undocumented Accounts


Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value A”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

[New post] [New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

| Categories: GATCA

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[New post] Undocumented Accounts

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Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

https://haydonperryman.com/gb/guidance/dac/aeim102880/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

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Haydon Perryman, CGMA | February 12, 2016 at 1:11 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value A"

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

[New post] [New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear"

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

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New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

| URL: http://wp.me/p4BlQ5-2zc

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Undocumented Accounts

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

| Categories: GATCA

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[New post] Undocumented Accounts

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear"

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

| URL: http://wp.me/p4BlQ5-2zc

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Undocumented Accounts

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Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

New post on FATCA, IGAs, AEI/CRS, DAC, CDOT & 871(m)

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder. 

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as: 

  • A US Specified Person for FATCA,
  • A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and
  • An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification 

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market. 

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts. 

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures. 

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature. 

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –
  • name;
  • residence address;
  • jurisdiction(s) of residence for tax purposes – see;
  • TIN with respect to each Reportable Jurisdiction (see above); and
  • date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS). 

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records. 

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request. 

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

125. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where the indicia search is completed (see below) and the only indiciafound is a “hold mail” or “in-care-of” address and no other address is found, thenspecial procedures apply (the undocumented account procedures). In the order  most appropriate, theReporting Financial Institution must: complete a paper record 
search; or obtain Documentary Evidence or a self-certification from the Account 
Holder.If neitheroftheseprocedures successfully  establishes the AccountHolder’s residence for tax purposes then the Reporting Financial Institution must report the account to the tax authority as an undocumented account.

CRS p. 33
Com p. 117

https://haydonperryman.com/gb/guidance/dac/aeim102880/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance, $CRS Guidance, 90 Days, AML/KYC Procedure, Annual Review, CDD, Change in Circumstance, Curing Indicia, DAC, DAC/CRS, Dated (Self Certification), Depository Account, DoB, Documentary Evidence, Electronic Records Search, Enhanced Review Procedures, Entity Account, FATCA, FI, GATCA Teaching Notes, Gov, High Value Account, HMRC enquiries, Hold Mail or In-Care-Of Address Only, Indicia, Jurisdiction, Jurisdiction of Residence, Lower Value Account, New Individual Account, onboarding, Paper Record Search, Place and Date of Birth, Place of Birth, Pre-Existing Individual Account, Pre-populated (Self-Certification), Publicly available information, Publicly Traded, Reason to Know, Reasonableness Test, Reportable Account, Reportable Person, reporting, Reporting Financial Institution, Residence Address, Risk Based Approach, Rule Map, self certification, Self Certification for New Entity Accounts, Self Certification for New Individual Accounts, Self Certification for Pre-existing Individual Accounts, Self-Certification Format (Paper or Electronic), Signed, Tax Identification Numbers (TINs), Thresholds, TIN, Undocumented Account, Undocumented Account Procedures, US Specified Person, USD 1M
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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD, GATCA Teaching Notes, Jurisdiction
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Haydon Perryman, CGMA | February 12, 2016 at 1:11 am | Tags: CDD, GATCA Teaching Notes, Jurisdiction
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