[New post] Unique Identifier


Haydon Perryman, CGMA posted: “102100 – Reportable Information: Reporting Financial Institution

102100 – Reportable Information: Reporting Financial Institution

The reporting financial institution must report its name and identifying number. This is to enable the jurisdiction receivi”

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

Unique Identifier

by Haydon Perryman, CGMA

102100 – Reportable Information: Reporting Financial Institution

102100 – Reportable Information: Reporting Financial Institution

The reporting financial institution must report its name and identifying number. This is to enable the jurisdiction receiving the information to identify easily the source of it if they have any follow-up questions in respect of the data reported. All UK financial institutions that are in scope for FATCA are required to register with the US Internal Revenue Service and obtain a Global Intermediary Identification Number ( GIIN ). The GIIN will be required as an identifying number for FATCA reporting. Where a financial institution is reporting under any of the other automatic exchange of information agreements, it must either report a GIIN or confirm it does not hold one.

Also, the financial institution will need to report a UK identifying number. This will take the form of either the unique taxpayer reference number ( UTR ) issued by HMRC to persons making annual tax returns. If the Financial Institution has not been issued with a UTR, then it may report another identifier issued for regulatory purposes such as a company registration number or confirm that no unique identifier is held.

04.14 – Aggregation

Source URL: https://haydonperryman.com/gb/guidance/fatca/04-14/

04.14 – Aggregation

To identify whether the accounts are reportable and whether they are Lower Value Accounts or High Value Accounts, a Financial Institution will need to consider aggregation of accounts of both individuals and entities in certain circumstances.

When do the aggregation rules apply?  Aggregation is required where the Financial Institution has elected under the UK legislation to apply the thresholds in relation to Reportable Accounts set out in Annex 1 of the Agreement. The aggregation rules also apply in determining whether an account is a High Value Account. (See Section 5.12 )

A Financial Institution is required to aggregate all Financial Accounts held by the same account holder that are maintained by it or by a Related Entity, but only to the extent that the Financial Institution’s current computerised systems link the Financial Accounts by reference to a data element, for example, a customer or taxpayer identification number.

Where accounts can be linked by a data element and details of the balances are provided, but the system does not provide an aggregated balance of the accounts, the Financial Institution will still be required to carry out the aggregation process.

Note: Financial Institutions should only aggregate accounts that are held by the same account holder. All accounts held by any Individual, or Entity, are required to be aggregated. However, if an Individual who holds accounts in their own name, is also a controlling person of an Entity, then the accounts of the Individual and the Entity for whom they are a controlling person should not be aggregated.

Relationship Manager

A Financial Institution may appoint a relationship manager for a customer’s accounts. The due diligence requirements (see 5.16 ) vary where there is a relationship manager depending on the value of accounts held by the customer.

Example 1 – Lower Value Account

An individual holds a number of accounts with Bank A and has been assigned a relationship manager. Bank A can aggregate the accounts by a taxpayer identification number found during the due diligence process.

The aggregated balance of accounts exceeds $50,000 and is less than $1million.

Bank A must apply due diligence procedures relevant to Lower Value Accounts (see 5.4 ). There is no need for Bank A to carry out the relationship manager enquiry as the $1million High Value Account threshold has not been exceeded.

Example 2 – High Value Accounts

The facts are as in Example 1 above, but the aggregated balance exceeds $1millon. As the aggregate balance of all Financial Accounts linked by a common data element and held by the individual exceeds $1,000,000 the Financial Institution must also make enquiry of any relationship manager(s) assigned to that individual to establish whether the relationship manager(s) knows of any additional accounts that are directly or indirectly owned, controlled or established (other than in a fiduciary capacity) by the same person.(see Section 5.16 Relationship Managers)

Exempt Products

If a product is exempt from being treated as a Financial Account, it does not need to be included for aggregation. So for example where an individual holds an ISA as well as several Depository Accounts with the same Financial Institution and their systems allow these to be linked, then the Financial Institution must aggregate the Depository Accounts but not the ISA.

Related Entities

Where a computer system links accounts across related entities, irrespective of where they are located, the Financial Institution will need to aggregate in considering whether any of the reporting thresholds apply. However, once it has considered the thresholds, the Financial Institution will only be responsible for reporting on the Reportable Accounts which it holds. The following example sets out how this could work in practice.

Example

Bank A is a UK Financial Institution and has a related entity Bank B, which is also a UK Financial Institution. Bank A can link the Depository Account of US Person X to a Custodial Account in the name of the same US Person X with Bank B, by the taxpayer identification number found during the due diligence process. The accounts have balances as follows:

Depository Account with Bank A $30,000

Custodial Account with Bank B $40,000

As the aggregated balance or value is $70,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Bank B must report on the account it holds for US Person X.

If Bank B were to be located in another jurisdiction, it would have to report on the account it holds under the FATCA arrangements of that jurisdiction.

Aggregation of Pre-existing Individual Accounts

The following examples provide illustrative outcomes that could occur from the aggregation process.

Example 1 – Application of the $50,000 threshold

Bank A has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person X by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $25,000

A Custodial Account with a balance of $20,000.

The aggregated total is below $50,000; therefore regardless of the types of account neither account will be reportable.

Example 2 – Application of the $50,000 threshold

In this scenario the account balances of US Person X are:

A Depository Account with a balance of $45,000

A Custodial Account with a balance of $7,000.

As the aggregated balance or value is $52,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Example 3 – Application of the $250,000 Cash Value Insurance Contract threshold

Company B is a UK Financial Institution and has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person Y by a client number found during the due diligence process:

A Cash Value Insurance Contract with a value of $230,000

A Custodial Account with a balance of $30,000

The aggregated balance or value indicates the accounts are potentially reportable (aggregated value above $50,000); however, as the Cash Value Insurance Contract is below the threshold that applies to that type of account, it is not reportable.

There is no Custodial Account exemption; therefore the Custodial Account is reportable.

Example 4 – Application of the $1million threshold for High Value Accounts

Bank A can link the accounts of US Person Z by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $40,000

A Custodial Account with a balance of $980,000.

As the aggregated total is more than $1million US Person Z is identified as a holder of a High Value Account. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable as a High Value Account.

Example 5 – Aggregation involving joint accounts

Two US Persons have three accounts between them, one deposit account each and a jointly held deposit account with the following balances:

US Person A $35,000

US Person B $25,000

Joint Account $30,000

A data element in the Financial Institution’s computer system allows the joint account to be associated with both A and B. The system shows the individual balances of the accounts; however, it does not show a combined balance. The fact that there is not a combined balance does not prevent the aggregation rules applying.

The balance on the joint account is attributable in full to each of the account holders. In this example, the aggregate balance for A would be $65,000 and for B $55,000. As the amounts after aggregation are more than the $50,000 threshold, both account holders will be reportable.

If A was not a US Person, then only B would be reportable following an aggregation exercise.

Example 6 – Aggregation of negative balances

Two US Persons have three accounts between them, one account each and a jointly held account, all with the same Financial Institution with the following balances:

US Person A $53,000

US Person B $49,000

Joint Account ($ 8,000) – treated as nil

The accounts can be linked and, therefore, must be aggregated, but for aggregation the negative balances should be treated as nil. Therefore, the only reportable account after applying the thresholds would be that for A.

Reporting

Once aggregation has taken place and it is determined that the accounts are reportable, the accounts should be reported individually. A Financial Institution should not consolidate the accounts for reporting purposes.

Example 7 – Separate account reporting

Person Y (a Specified US Person) holds three Depository Accounts with Bank Z. The balances are as follows:

Account 0001 $ 3,000

Account 0002 $32,000

Account 0003 $25,000

The aggregated balances total $60,000 and all the accounts are reportable. Bank Z should report on the three accounts individually and not consolidate the information into a single entry for reporting purposes.

Aggregation of Pre-existing Entity Accounts

For purposes of determining the aggregate balance or value of accounts held by an entity, all accounts held by the entity will need to be aggregated where the Financial Institution has elected under the UK legislation to apply the thresholds set out in Annex I of the Agreement and the Financial Institution’s computerised system can link the accounts by reference to a common data element.

Example 8 – Aggregation of Pre-existing Entity Accounts

Person A (a Specified US Person) has an individual Depository Account with Bank X. Person A also controls 100 percent of entity Y and 50% of entity Z both of which also have Depository Accounts with Bank X. The balances are as follows:

Individual Depository Account $35,000

Entity Y Depository Account $130,000

Entity Z Depository Account $110,000

Bank X has elected to apply the relevant thresholds in Annex I and these accounts can be linked in Bank X’s system.

The individual Depository Account is not reportable as it is below the $50,000 threshold.

Entity Y’s and Entity Z’s Depository Accounts are also non-reportable as the aggregated balances are below the $250,000 threshold that applies to Pre-existing Entity Accounts.

11.02 – Explanation of information required

Source URL: https://haydonperryman.com/gb/guidance/cdot/11-02/

11.02 – Explanation of information required

The relevant CD or Gibraltar TIN must be reported where it is held. The nature of the TIN to be supplied for each jurisdiction is outlined at 4.5 of this guidance.

The identifying number of the Reporting Financial Institution will be the GIIN supplied by the IRS for FATCA purposes if the Reporting Financial Institution has obtained a GIIN. If they have not then they should report using their HMRC issued UTR instead.

13.00 – Registration

Source URL: https://haydonperryman.com/gb/guidance/cdot/13-00/

13.00 – Registration

There will be no IRS style registration for UK/CD reporting, and the UK will not be issuing GIINs or similar identifiers to Reporting Financial Institutions.

However all Reporting Financial Institutions will have an obligation to make a return to HMRC, and to do this they will have to ‘register’ for FATCA reporting on the Government Gateway in the same way that they will have to do for US reporting.

If the Reporting Financial Institution maintains no Reportable Accounts then an annual Nil return must be made.

Unique Identifier

Source URL: https://haydonperryman.com/terms-and-definitions/unique-identifier/

Unique Identifier

The account number to be reported is the unique identifying number or code that the reporting financial institution has assigned to the Reportable Account. This will include identifiers such as bank account numbers and policy numbers for insurance contracts as well as other non-traditional unique identifiers. The unique identifier should be sufficient to enable the financial institution to identify the Reportable Account in future. Where there is not a unique identifying number or code the financial institution should report any functional equivalent that they use to identify the account. This may include non-unique identifiers that relate to a class of interests, which, along with the name of the Account Holder, enable the account to be identified. Exceptionally, if the Reportable Account does not have any form of identifying number or code the financial institution should report a description of the account sufficient to identify the account held by the named Account Holder in future.

102100 – Reportable Information: Reporting Financial Institution

102100 – Reportable Information: Reporting Financial Institution

The reporting financial institution must report its name and identifying number. This is to enable the jurisdiction receiving the information to identify easily the source of it if they have any follow-up questions in respect of the data reported.All UK financial institutions that are in scope for FATCA are required to register with the US Internal Revenue Service and obtain a Global Intermediary Identification Number ( GIIN ). The GIIN will be required as an identifying number for FATCA reporting. Where a financial institution is reporting under any of the other automatic exchange of information agreements, it must either report a GIIN or confirm it does not hold one.

Also, the financial institution will need to report a UK identifying number. This will take the form of either the unique taxpayer reference number ( UTR ) issued by HMRC to persons making annual tax returns. If the Financial Institution has not been issued with a UTR, then it may report another identifier issued for regulatory purposes such as a company registration number or confirm that no unique identifier is held.

04.14 – Aggregation

Source URL: https://haydonperryman.com/gb/guidance/fatca/04-14/

04.14 – Aggregation

To identify whether the accounts are reportable and whether they are Lower Value Accounts or High Value Accounts, a Financial Institution will need to consider aggregation of accounts of both individuals and entities in certain circumstances.

When do the aggregation rules apply?  Aggregation is required where the Financial Institution has elected under the UK legislation to apply the thresholds in relation to Reportable Accounts set out in Annex 1 of the Agreement. The aggregation rules also apply in determining whether an account is a High Value Account. (See Section 5.12 )

A Financial Institution is required to aggregate all Financial Accounts held by the same account holder that are maintained by it or by a Related Entity, but only to the extent that the Financial Institution’s current computerised systems link the Financial Accounts by reference to a data element, for example, a customer or taxpayer identification number.

Where accounts can be linked by a data element and details of the balances are provided, but the system does not provide an aggregated balance of the accounts, the Financial Institution will still be required to carry out the aggregation process.

Note: Financial Institutions should only aggregate accounts that are held by the same account holder. All accounts held by any Individual, or Entity, are required to be aggregated. However, if an Individual who holds accounts in their own name, is also a controlling person of an Entity, then the accounts of the Individual and the Entity for whom they are a controlling person should not be aggregated.

Relationship Manager

A Financial Institution may appoint a relationship manager for a customer’s accounts. The due diligence requirements (see 5.16 ) vary where there is a relationship manager depending on the value of accounts held by the customer.

Example 1 – Lower Value Account

An individual holds a number of accounts with Bank A and has been assigned a relationship manager. Bank A can aggregate the accounts by a taxpayer identification number found during the due diligence process.

The aggregated balance of accounts exceeds $50,000 and is less than $1million.

Bank A must apply due diligence procedures relevant to Lower Value Accounts (see 5.4 ). There is no need for Bank A to carry out the relationship manager enquiry as the $1million High Value Account threshold has not been exceeded.

Example 2 – High Value Accounts

The facts are as in Example 1 above, but the aggregated balance exceeds $1millon. As the aggregate balance of all Financial Accounts linked by a common data element and held by the individual exceeds $1,000,000 the Financial Institution must also make enquiry of any relationship manager(s) assigned to that individual to establish whether the relationship manager(s) knows of any additional accounts that are directly or indirectly owned, controlled or established (other than in a fiduciary capacity) by the same person.(see Section 5.16 Relationship Managers)

Exempt Products

If a product is exempt from being treated as a Financial Account, it does not need to be included for aggregation. So for example where an individual holds an ISA as well as several Depository Accounts with the same Financial Institution and their systems allow these to be linked, then the Financial Institution must aggregate the Depository Accounts but not the ISA.

Related Entities

Where a computer system links accounts across related entities, irrespective of where they are located, the Financial Institution will need to aggregate in considering whether any of the reporting thresholds apply. However, once it has considered the thresholds, the Financial Institution will only be responsible for reporting on the Reportable Accounts which it holds. The following example sets out how this could work in practice.

Example

Bank A is a UK Financial Institution and has a related entity Bank B, which is also a UK Financial Institution. Bank A can link the Depository Account of US Person X to a Custodial Account in the name of the same US Person X with Bank B, by the taxpayer identification number found during the due diligence process. The accounts have balances as follows:

Depository Account with Bank A $30,000

Custodial Account with Bank B $40,000

As the aggregated balance or value is $70,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Bank B must report on the account it holds for US Person X.

If Bank B were to be located in another jurisdiction, it would have to report on the account it holds under the FATCA arrangements of that jurisdiction.

Aggregation of Pre-existing Individual Accounts

The following examples provide illustrative outcomes that could occur from the aggregation process.

Example 1 – Application of the $50,000 threshold

Bank A has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person X by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $25,000

A Custodial Account with a balance of $20,000.

The aggregated total is below $50,000; therefore regardless of the types of account neither account will be reportable.

Example 2 – Application of the $50,000 threshold

In this scenario the account balances of US Person X are:

A Depository Account with a balance of $45,000

A Custodial Account with a balance of $7,000.

As the aggregated balance or value is $52,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Example 3 – Application of the $250,000 Cash Value Insurance Contract threshold

Company B is a UK Financial Institution and has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person Y by a client number found during the due diligence process:

A Cash Value Insurance Contract with a value of $230,000

A Custodial Account with a balance of $30,000

The aggregated balance or value indicates the accounts are potentially reportable (aggregated value above $50,000); however, as the Cash Value Insurance Contract is below the threshold that applies to that type of account, it is not reportable.

There is no Custodial Account exemption; therefore the Custodial Account is reportable.

Example 4 – Application of the $1million threshold for High Value Accounts

Bank A can link the accounts of US Person Z by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $40,000

A Custodial Account with a balance of $980,000.

As the aggregated total is more than $1million US Person Z is identified as a holder of a High Value Account. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable as a High Value Account.

Example 5 – Aggregation involving joint accounts

Two US Persons have three accounts between them, one deposit account each and a jointly held deposit account with the following balances:

US Person A $35,000

US Person B $25,000

Joint Account $30,000

A data element in the Financial Institution’s computer system allows the joint account to be associated with both A and B. The system shows the individual balances of the accounts; however, it does not show a combined balance. The fact that there is not a combined balance does not prevent the aggregation rules applying.

The balance on the joint account is attributable in full to each of the account holders. In this example, the aggregate balance for A would be $65,000 and for B $55,000. As the amounts after aggregation are more than the $50,000 threshold, both account holders will be reportable.

If A was not a US Person, then only B would be reportable following an aggregation exercise.

Example 6 – Aggregation of negative balances

Two US Persons have three accounts between them, one account each and a jointly held account, all with the same Financial Institution with the following balances:

US Person A $53,000

US Person B $49,000

Joint Account ($ 8,000) – treated as nil

The accounts can be linked and, therefore, must be aggregated, but for aggregation the negative balances should be treated as nil. Therefore, the only reportable account after applying the thresholds would be that for A.

Reporting

Once aggregation has taken place and it is determined that the accounts are reportable, the accounts should be reported individually. A Financial Institution should not consolidate the accounts for reporting purposes.

Example 7 – Separate account reporting

Person Y (a Specified US Person) holds three Depository Accounts with Bank Z. The balances are as follows:

Account 0001 $ 3,000

Account 0002 $32,000

Account 0003 $25,000

The aggregated balances total $60,000 and all the accounts are reportable. Bank Z should report on the three accounts individually and not consolidate the information into a single entry for reporting purposes.

Aggregation of Pre-existing Entity Accounts

For purposes of determining the aggregate balance or value of accounts held by an entity, all accounts held by the entity will need to be aggregated where the Financial Institution has elected under the UK legislation to apply the thresholds set out in Annex I of the Agreement and the Financial Institution’s computerised system can link the accounts by reference to a common data element.

Example 8 – Aggregation of Pre-existing Entity Accounts

Person A (a Specified US Person) has an individual Depository Account with Bank X. Person A also controls 100 percent of entity Y and 50% of entity Z both of which also have Depository Accounts with Bank X. The balances are as follows:

Individual Depository Account $35,000

Entity Y Depository Account $130,000

Entity Z Depository Account $110,000

Bank X has elected to apply the relevant thresholds in Annex I and these accounts can be linked in Bank X’s system.

The individual Depository Account is not reportable as it is below the $50,000 threshold.

Entity Y’s and Entity Z’s Depository Accounts are also non-reportable as the aggregated balances are below the $250,000 threshold that applies to Pre-existing Entity Accounts.

11.02 – Explanation of information required

Source URL: https://haydonperryman.com/gb/guidance/cdot/11-02/

11.02 – Explanation of information required

The relevant CD or Gibraltar TIN must be reported where it is held. The nature of the TIN to be supplied for each jurisdiction is outlined at 4.5 of this guidance.

The identifying number of the Reporting Financial Institution will be the GIIN supplied by the IRS for FATCA purposes if the Reporting Financial Institution has obtained a GIIN. If they have not then they should report using their HMRC issued UTR instead.

13.00 – Registration

Source URL: https://haydonperryman.com/gb/guidance/cdot/13-00/

13.00 – Registration

There will be no IRS style registration for UK/CD reporting, and the UK will not be issuing GIINs or similar identifiers to Reporting Financial Institutions.

However all Reporting Financial Institutions will have an obligation to make a return to HMRC, and to do this they will have to ‘register’ for FATCA reporting on the Government Gateway in the same way that they will have to do for US reporting.

If the Reporting Financial Institution maintains no Reportable Accounts then an annual Nil return must be made.

Unique Identifier

Source URL: https://haydonperryman.com/terms-and-definitions/unique-identifier/

Unique Identifier

The account number to be reported is the unique identifying number or code that the reporting financial institution has assigned to the Reportable Account. This will include identifiers such as bank account numbers and policy numbers for insurance contracts as well as other non-traditional unique identifiers. The unique identifier should be sufficient to enable the financial institution to identify the Reportable Account in future. Where there is not a unique identifying number or code the financial institution should report any functional equivalent that they use to identify the account. This may include non-unique identifiers that relate to a class of interests, which, along with the name of the Account Holder, enable the account to be identified. Exceptionally, if the Reportable Account does not have any form of identifying number or code the financial institution should report a description of the account sufficient to identify the account held by the named Account Holder in future.

https://haydonperryman.com/gb/guidance/dac/aeim102100/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CDOT Guidance , $Definitions , $UK IGA Guidance , Aggregation , Aggregation to the extent , Company Registration Number , Data element , Entity , FATCA , GATCA Teaching Notes , GIIN , High Value Account , Joint Account , Lower Value Account , Natural Person , Nil Returns , registration , Relationship Manager , Reportable Information , reporting , Reporting Financial Institution , Rule Map , Thresholds , TIN , unique identifier , UTR

| Categories: GATCA

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

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Haydon Perryman, CGMA posted: "102100 – Reportable Information: Reporting Financial Institution

102100 – Reportable Information: Reporting Financial Institution

The reporting financial institution must report its name and identifying number. This is to enable the jurisdiction receivi"

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

Unique Identifier

by Haydon Perryman, CGMA

102100 – Reportable Information: Reporting Financial Institution

102100 – Reportable Information: Reporting Financial Institution

The reporting financial institution must report its name and identifying number. This is to enable the jurisdiction receiving the information to identify easily the source of it if they have any follow-up questions in respect of the data reported. All UK financial institutions that are in scope for FATCA are required to register with the US Internal Revenue Service and obtain a Global Intermediary Identification Number ( GIIN ). The GIIN will be required as an identifying number for FATCA reporting. Where a financial institution is reporting under any of the other automatic exchange of information agreements, it must either report a GIIN or confirm it does not hold one.

Also, the financial institution will need to report a UK identifying number. This will take the form of either the unique taxpayer reference number ( UTR ) issued by HMRC to persons making annual tax returns. If the Financial Institution has not been issued with a UTR, then it may report another identifier issued for regulatory purposes such as a company registration number or confirm that no unique identifier is held.

04.14 – Aggregation

Source URL: https://haydonperryman.com/gb/guidance/fatca/04-14/

04.14 – Aggregation

To identify whether the accounts are reportable and whether they are Lower Value Accounts or High Value Accounts, a Financial Institution will need to consider aggregation of accounts of both individuals and entities in certain circumstances.

When do the aggregation rules apply?  Aggregation is required where the Financial Institution has elected under the UK legislation to apply the thresholds in relation to Reportable Accounts set out in Annex 1 of the Agreement. The aggregation rules also apply in determining whether an account is a High Value Account. (See Section 5.12 )

A Financial Institution is required to aggregate all Financial Accounts held by the same account holder that are maintained by it or by a Related Entity, but only to the extent that the Financial Institution’s current computerised systems link the Financial Accounts by reference to a data element, for example, a customer or taxpayer identification number.

Where accounts can be linked by a data element and details of the balances are provided, but the system does not provide an aggregated balance of the accounts, the Financial Institution will still be required to carry out the aggregation process.

Note: Financial Institutions should only aggregate accounts that are held by the same account holder. All accounts held by any Individual, or Entity, are required to be aggregated. However, if an Individual who holds accounts in their own name, is also a controlling person of an Entity, then the accounts of the Individual and the Entity for whom they are a controlling person should not be aggregated.

Relationship Manager

A Financial Institution may appoint a relationship manager for a customer’s accounts. The due diligence requirements (see 5.16 ) vary where there is a relationship manager depending on the value of accounts held by the customer.

Example 1 – Lower Value Account

An individual holds a number of accounts with Bank A and has been assigned a relationship manager. Bank A can aggregate the accounts by a taxpayer identification number found during the due diligence process.

The aggregated balance of accounts exceeds $50,000 and is less than $1million.

Bank A must apply due diligence procedures relevant to Lower Value Accounts (see 5.4 ). There is no need for Bank A to carry out the relationship manager enquiry as the $1million High Value Account threshold has not been exceeded.

Example 2 – High Value Accounts

The facts are as in Example 1 above, but the aggregated balance exceeds $1millon. As the aggregate balance of all Financial Accounts linked by a common data element and held by the individual exceeds $1,000,000 the Financial Institution must also make enquiry of any relationship manager(s) assigned to that individual to establish whether the relationship manager(s) knows of any additional accounts that are directly or indirectly owned, controlled or established (other than in a fiduciary capacity) by the same person.(see Section 5.16 Relationship Managers)

Exempt Products

If a product is exempt from being treated as a Financial Account, it does not need to be included for aggregation. So for example where an individual holds an ISA as well as several Depository Accounts with the same Financial Institution and their systems allow these to be linked, then the Financial Institution must aggregate the Depository Accounts but not the ISA.

Related Entities

Where a computer system links accounts across related entities, irrespective of where they are located, the Financial Institution will need to aggregate in considering whether any of the reporting thresholds apply. However, once it has considered the thresholds, the Financial Institution will only be responsible for reporting on the Reportable Accounts which it holds. The following example sets out how this could work in practice.

Example

Bank A is a UK Financial Institution and has a related entity Bank B, which is also a UK Financial Institution. Bank A can link the Depository Account of US Person X to a Custodial Account in the name of the same US Person X with Bank B, by the taxpayer identification number found during the due diligence process. The accounts have balances as follows:

Depository Account with Bank A $30,000

Custodial Account with Bank B $40,000

As the aggregated balance or value is $70,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Bank B must report on the account it holds for US Person X.

If Bank B were to be located in another jurisdiction, it would have to report on the account it holds under the FATCA arrangements of that jurisdiction.

Aggregation of Pre-existing Individual Accounts

The following examples provide illustrative outcomes that could occur from the aggregation process.

Example 1 – Application of the $50,000 threshold

Bank A has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person X by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $25,000

A Custodial Account with a balance of $20,000.

The aggregated total is below $50,000; therefore regardless of the types of account neither account will be reportable.

Example 2 – Application of the $50,000 threshold

In this scenario the account balances of US Person X are:

A Depository Account with a balance of $45,000

A Custodial Account with a balance of $7,000.

As the aggregated balance or value is $52,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Example 3 – Application of the $250,000 Cash Value Insurance Contract threshold

Company B is a UK Financial Institution and has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person Y by a client number found during the due diligence process:

A Cash Value Insurance Contract with a value of $230,000

A Custodial Account with a balance of $30,000

The aggregated balance or value indicates the accounts are potentially reportable (aggregated value above $50,000); however, as the Cash Value Insurance Contract is below the threshold that applies to that type of account, it is not reportable.

There is no Custodial Account exemption; therefore the Custodial Account is reportable.

Example 4 – Application of the $1million threshold for High Value Accounts

Bank A can link the accounts of US Person Z by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $40,000

A Custodial Account with a balance of $980,000.

As the aggregated total is more than $1million US Person Z is identified as a holder of a High Value Account. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable as a High Value Account.

Example 5 – Aggregation involving joint accounts

Two US Persons have three accounts between them, one deposit account each and a jointly held deposit account with the following balances:

US Person A $35,000

US Person B $25,000

Joint Account $30,000

A data element in the Financial Institution’s computer system allows the joint account to be associated with both A and B. The system shows the individual balances of the accounts; however, it does not show a combined balance. The fact that there is not a combined balance does not prevent the aggregation rules applying.

The balance on the joint account is attributable in full to each of the account holders. In this example, the aggregate balance for A would be $65,000 and for B $55,000. As the amounts after aggregation are more than the $50,000 threshold, both account holders will be reportable.

If A was not a US Person, then only B would be reportable following an aggregation exercise.

Example 6 – Aggregation of negative balances

Two US Persons have three accounts between them, one account each and a jointly held account, all with the same Financial Institution with the following balances:

US Person A $53,000

US Person B $49,000

Joint Account ($ 8,000) – treated as nil

The accounts can be linked and, therefore, must be aggregated, but for aggregation the negative balances should be treated as nil. Therefore, the only reportable account after applying the thresholds would be that for A.

Reporting

Once aggregation has taken place and it is determined that the accounts are reportable, the accounts should be reported individually. A Financial Institution should not consolidate the accounts for reporting purposes.

Example 7 – Separate account reporting

Person Y (a Specified US Person) holds three Depository Accounts with Bank Z. The balances are as follows:

Account 0001 $ 3,000

Account 0002 $32,000

Account 0003 $25,000

The aggregated balances total $60,000 and all the accounts are reportable. Bank Z should report on the three accounts individually and not consolidate the information into a single entry for reporting purposes.

Aggregation of Pre-existing Entity Accounts

For purposes of determining the aggregate balance or value of accounts held by an entity, all accounts held by the entity will need to be aggregated where the Financial Institution has elected under the UK legislation to apply the thresholds set out in Annex I of the Agreement and the Financial Institution’s computerised system can link the accounts by reference to a common data element.

Example 8 – Aggregation of Pre-existing Entity Accounts

Person A (a Specified US Person) has an individual Depository Account with Bank X. Person A also controls 100 percent of entity Y and 50% of entity Z both of which also have Depository Accounts with Bank X. The balances are as follows:

Individual Depository Account $35,000

Entity Y Depository Account $130,000

Entity Z Depository Account $110,000

Bank X has elected to apply the relevant thresholds in Annex I and these accounts can be linked in Bank X’s system.

The individual Depository Account is not reportable as it is below the $50,000 threshold.

Entity Y’s and Entity Z’s Depository Accounts are also non-reportable as the aggregated balances are below the $250,000 threshold that applies to Pre-existing Entity Accounts.

11.02 – Explanation of information required

Source URL: https://haydonperryman.com/gb/guidance/cdot/11-02/

11.02 – Explanation of information required

The relevant CD or Gibraltar TIN must be reported where it is held. The nature of the TIN to be supplied for each jurisdiction is outlined at 4.5 of this guidance.

The identifying number of the Reporting Financial Institution will be the GIIN supplied by the IRS for FATCA purposes if the Reporting Financial Institution has obtained a GIIN. If they have not then they should report using their HMRC issued UTR instead.

13.00 – Registration

Source URL: https://haydonperryman.com/gb/guidance/cdot/13-00/

13.00 – Registration

There will be no IRS style registration for UK/CD reporting, and the UK will not be issuing GIINs or similar identifiers to Reporting Financial Institutions.

However all Reporting Financial Institutions will have an obligation to make a return to HMRC, and to do this they will have to ‘register’ for FATCA reporting on the Government Gateway in the same way that they will have to do for US reporting.

If the Reporting Financial Institution maintains no Reportable Accounts then an annual Nil return must be made.

Unique Identifier

Source URL: https://haydonperryman.com/terms-and-definitions/unique-identifier/

Unique Identifier

The account number to be reported is the unique identifying number or code that the reporting financial institution has assigned to the Reportable Account. This will include identifiers such as bank account numbers and policy numbers for insurance contracts as well as other non-traditional unique identifiers. The unique identifier should be sufficient to enable the financial institution to identify the Reportable Account in future. Where there is not a unique identifying number or code the financial institution should report any functional equivalent that they use to identify the account. This may include non-unique identifiers that relate to a class of interests, which, along with the name of the Account Holder, enable the account to be identified. Exceptionally, if the Reportable Account does not have any form of identifying number or code the financial institution should report a description of the account sufficient to identify the account held by the named Account Holder in future.

102100 – Reportable Information: Reporting Financial Institution

102100 – Reportable Information: Reporting Financial Institution

The reporting financial institution must report its name and identifying number. This is to enable the jurisdiction receiving the information to identify easily the source of it if they have any follow-up questions in respect of the data reported.All UK financial institutions that are in scope for FATCA are required to register with the US Internal Revenue Service and obtain a Global Intermediary Identification Number (GIIN). The GIIN will be required as an identifying number for FATCA reporting. Where a financial institution is reporting under any of the other automatic exchange of information agreements, it must either report a GIIN or confirm it does not hold one.

Also, the financial institution will need to report a UK identifying number. This will take the form of either the unique taxpayer reference number (UTR) issued by HMRC to persons making annual tax returns. If the Financial Institution has not been issued with a UTR, then it may report another identifier issued for regulatory purposes such as a company registration number or confirm that no unique identifier is held.

04.14 – Aggregation

Source URL: https://haydonperryman.com/gb/guidance/fatca/04-14/

04.14 – Aggregation

To identify whether the accounts are reportable and whether they are Lower Value Accounts or High Value Accounts, a Financial Institution will need to consider aggregation of accounts of both individuals and entities in certain circumstances.
When do the aggregation rules apply? Aggregation is required where the Financial Institution has elected under the UK legislation to apply the thresholds in relation to Reportable Accounts set out in Annex 1 of the Agreement. The aggregation rules also apply in determining whether an account is a High Value Account. (See Section 5.12)

A Financial Institution is required to aggregate all Financial Accounts held by the same account holder that are maintained by it or by a Related Entity, but only to the extent that the Financial Institution’s current computerised systems link the Financial Accounts by reference to a data element, for example, a customer or taxpayer identification number.

Where accounts can be linked by a data element and details of the balances are provided, but the system does not provide an aggregated balance of the accounts, the Financial Institution will still be required to carry out the aggregation process.

Note: Financial Institutions should only aggregate accounts that are held by the same account holder. All accounts held by any Individual, or Entity, are required to be aggregated. However, if an Individual who holds accounts in their own name, is also a controlling person of an Entity, then the accounts of the Individual and the Entity for whom they are a controlling person should not be aggregated.

Relationship Manager

A Financial Institution may appoint a relationship manager for a customer’s accounts. The due diligence requirements (see 5.16) vary where there is a relationship manager depending on the value of accounts held by the customer.

Example 1 – Lower Value Account

An individual holds a number of accounts with Bank A and has been assigned a relationship manager. Bank A can aggregate the accounts by a taxpayer identification number found during the due diligence process.

The aggregated balance of accounts exceeds $50,000 and is less than $1million.

Bank A must apply due diligence procedures relevant to Lower Value Accounts (see 5.4). There is no need for Bank A to carry out the relationship manager enquiry as the $1million High Value Account threshold has not been exceeded.

Example 2 – High Value Accounts

The facts are as in Example 1 above, but the aggregated balance exceeds $1millon. As the aggregate balance of all Financial Accounts linked by a common data element and held by the individual exceeds $1,000,000 the Financial Institution must also make enquiry of any relationship manager(s) assigned to that individual to establish whether the relationship manager(s) knows of any additional accounts that are directly or indirectly owned, controlled or established (other than in a fiduciary capacity) by the same person.(see Section 5.16 Relationship Managers)

Exempt Products

If a product is exempt from being treated as a Financial Account, it does not need to be included for aggregation. So for example where an individual holds an ISA as well as several Depository Accounts with the same Financial Institution and their systems allow these to be linked, then the Financial Institution must aggregate the Depository Accounts but not the ISA.

Related Entities

Where a computer system links accounts across related entities, irrespective of where they are located, the Financial Institution will need to aggregate in considering whether any of the reporting thresholds apply. However, once it has considered the thresholds, the Financial Institution will only be responsible for reporting on the Reportable Accounts which it holds. The following example sets out how this could work in practice.

Example

Bank A is a UK Financial Institution and has a related entity Bank B, which is also a UK Financial Institution. Bank A can link the Depository Account of US Person X to a Custodial Account in the name of the same US Person X with Bank B, by the taxpayer identification number found during the due diligence process. The accounts have balances as follows:

Depository Account with Bank A $30,000

Custodial Account with Bank B $40,000

As the aggregated balance or value is $70,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Bank B must report on the account it holds for US Person X.

If Bank B were to be located in another jurisdiction, it would have to report on the account it holds under the FATCA arrangements of that jurisdiction.

Aggregation of Pre-existing Individual Accounts

The following examples provide illustrative outcomes that could occur from the aggregation process.

Example 1 – Application of the $50,000 threshold

Bank A has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person X by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $25,000

A Custodial Account with a balance of $20,000.

The aggregated total is below $50,000; therefore regardless of the types of account neither account will be reportable.

Example 2 – Application of the $50,000 threshold

In this scenario the account balances of US Person X are:

A Depository Account with a balance of $45,000

A Custodial Account with a balance of $7,000.

As the aggregated balance or value is $52,000 the accounts are potentially reportable. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable because the aggregated total exceeds $50,000 and there is no Custodial Account exemption that can apply.

Example 3 – Application of the $250,000 Cash Value Insurance Contract threshold

Company B is a UK Financial Institution and has elected to apply the relevant thresholds in Annex I. It can link the following accounts of US Person Y by a client number found during the due diligence process:

A Cash Value Insurance Contract with a value of $230,000

A Custodial Account with a balance of $30,000

The aggregated balance or value indicates the accounts are potentially reportable (aggregated value above $50,000); however, as the Cash Value Insurance Contract is below the threshold that applies to that type of account, it is not reportable.

There is no Custodial Account exemption; therefore the Custodial Account is reportable.

Example 4 – Application of the $1million threshold for High Value Accounts

Bank A can link the accounts of US Person Z by a taxpayer identification number found during the due diligence process:

A Depository Account with a balance of $40,000

A Custodial Account with a balance of $980,000.

As the aggregated total is more than $1million US Person Z is identified as a holder of a High Value Account. However, the Depository Account balance is below the $50,000 threshold for Depository Accounts and is therefore not reportable.

The Custodial Account in this example is reportable as a High Value Account.

Example 5 – Aggregation involving joint accounts

Two US Persons have three accounts between them, one deposit account each and a jointly held deposit account with the following balances:

US Person A $35,000

US Person B $25,000

Joint Account $30,000

A data element in the Financial Institution’s computer system allows the joint account to be associated with both A and B. The system shows the individual balances of the accounts; however, it does not show a combined balance. The fact that there is not a combined balance does not prevent the aggregation rules applying.

The balance on the joint account is attributable in full to each of the account holders. In this example, the aggregate balance for A would be $65,000 and for B $55,000. As the amounts after aggregation are more than the $50,000 threshold, both account holders will be reportable.

If A was not a US Person, then only B would be reportable following an aggregation exercise.

Example 6 – Aggregation of negative balances

Two US Persons have three accounts between them, one account each and a jointly held account, all with the same Financial Institution with the following balances:

US Person A $53,000

US Person B $49,000

Joint Account ($ 8,000) – treated as nil

The accounts can be linked and, therefore, must be aggregated, but for aggregation the negative balances should be treated as nil. Therefore, the only reportable account after applying the thresholds would be that for A.

Reporting

Once aggregation has taken place and it is determined that the accounts are reportable, the accounts should be reported individually. A Financial Institution should not consolidate the accounts for reporting purposes.

Example 7 – Separate account reporting

Person Y (a Specified US Person) holds three Depository Accounts with Bank Z. The balances are as follows:

Account 0001 $ 3,000

Account 0002 $32,000

Account 0003 $25,000

The aggregated balances total $60,000 and all the accounts are reportable. Bank Z should report on the three accounts individually and not consolidate the information into a single entry for reporting purposes.

Aggregation of Pre-existing Entity Accounts

For purposes of determining the aggregate balance or value of accounts held by an entity, all accounts held by the entity will need to be aggregated where the Financial Institution has elected under the UK legislation to apply the thresholds set out in Annex I of the Agreement and the Financial Institution’s computerised system can link the accounts by reference to a common data element.

Example 8 – Aggregation of Pre-existing Entity Accounts

Person A (a Specified US Person) has an individual Depository Account with Bank X. Person A also controls 100 percent of entity Y and 50% of entity Z both of which also have Depository Accounts with Bank X. The balances are as follows:

Individual Depository Account $35,000

Entity Y Depository Account $130,000

Entity Z Depository Account $110,000

Bank X has elected to apply the relevant thresholds in Annex I and these accounts can be linked in Bank X’s system.

The individual Depository Account is not reportable as it is below the $50,000 threshold.

Entity Y’s and Entity Z’s Depository Accounts are also non-reportable as the aggregated balances are below the $250,000 threshold that applies to Pre-existing Entity Accounts.

11.02 – Explanation of information required

Source URL: https://haydonperryman.com/gb/guidance/cdot/11-02/

11.02 – Explanation of information required

The relevant CD or Gibraltar TIN must be reported where it is held. The nature of the TIN to be supplied for each jurisdiction is outlined at 4.5 of this guidance.

The identifying number of the Reporting Financial Institution will be the GIIN supplied by the IRS for FATCA purposes if the Reporting Financial Institution has obtained a GIIN. If they have not then they should report using their HMRC issued UTR instead.

13.00 – Registration

Source URL: https://haydonperryman.com/gb/guidance/cdot/13-00/

13.00 – Registration

There will be no IRS style registration for UK/CD reporting, and the UK will not be issuing GIINs or similar identifiers to Reporting Financial Institutions.

However all Reporting Financial Institutions will have an obligation to make a return to HMRC, and to do this they will have to ‘register’ for FATCA reporting on the Government Gateway in the same way that they will have to do for US reporting.

If the Reporting Financial Institution maintains no Reportable Accounts then an annual Nil return must be made.

Unique Identifier

Source URL: https://haydonperryman.com/terms-and-definitions/unique-identifier/

Unique Identifier

The account number to be reported is the unique identifying number or code that the reporting financial institution has assigned to the Reportable Account. This will include identifiers such as bank account numbers and policy numbers for insurance contracts as well as other non-traditional unique identifiers. The unique identifier should be sufficient to enable the financial institution to identify the Reportable Account in future. Where there is not a unique identifying number or code the financial institution should report any functional equivalent that they use to identify the account. This may include non-unique identifiers that relate to a class of interests, which, along with the name of the Account Holder, enable the account to be identified. Exceptionally, if the Reportable Account does not have any form of identifying number or code the financial institution should report a description of the account sufficient to identify the account held by the named Account Holder in future.

https://haydonperryman.com/gb/guidance/dac/aeim102100/

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