102565 – Due Diligence: General Requirements: Thresholds

The intergovernmental agreements with the USA and the Crown Dependences and Overseas Territories allow for certain thresholds to apply below which due diligence on relevant accounts does not need to be carried out. With one exception, pre-existing entity accounts, such thresholds do not apply to the due diligence requirements under the DAC/DAC/CRS.

The way this works is that the UK regulations require all accounts to be the subject of due diligence and possible reporting but give financial institutions the option to elect to apply the thresholds to exempt certain accounts from this requirement. The election can be made in respect of some or all of the following categories of a financial account and can also be applied to clearly identifiable groups of accounts, such as by line of business or by reference to the location where the accounts are maintained. The financial accounts that can be subject to election for reporting thresholds to apply are:

  • Any Depository Account with a balance or value not exceeding an amount equivalent to US$50,000. This election is not available for the DAC/CRS.
  • Pre-existing individual accounts with a balance or value not exceeding an amount equivalent to US$50,000 as at 30 June 2014, unless the account becomes a High Value Account as at the end of a subsequent appropriate reporting period. This election is not available for the DAC/CRS.
  • Pre-existing individual accounts that are cash value insurance policies or Annuity Contracts with a balance or value not exceeding an amount equivalent to US$250,000 as at 30 June 2014, unless the account becomes a High Value Account as at the end of a subsequent appropriate reporting period. This election is not available for the DAC/CRS.
  • Pre-existing entity accounts with a balance or value not exceeding an amount equivalent to US$250,000. This election is available under all the AEOI regimes. 

With the exception of the election for Depository Accounts, the rules on aggregation of account balances and values must be applied for the purpose of determining whether or not an account is below the threshold for election. Some examples of how the thresholds apply can be found at AEIM 102580.