102660 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts

In determining whether an Account Holder of a Lower Value Account is a Reportable Person for DAC/CRS or CDOT purposes financial institutions have two options for making such a determination. They can apply either

i. A residence address test, or

ii. An electronic record search.

If the financial institution applies the residence address test and this does not determine the residence of the individual Account Holder, then it must also apply the electronic record search.

Financial institutions can apply the residence address test to all Lower Value Accounts or, separately, to any clearly identified group of such accounts. A group of accounts may, for example, be those maintained by a particular line of business or those maintained in a particular location.

Financial institutions may also opt to go straight to an electronic record search for indicia of tax residence without first applying the residence address test.

As FATCA reporting requires the financial institution to search for indicia of US citizenship, the residence address test is not appropriate thus for FATCA only the electronic record search is permitted.