The Agreement applies to UK Financial Institutions. Under the Agreement, a UK Financial Institution is any Financial Institution resident in the UK, as well as any branch of a non-resident Financial Institution located in the UK, including a UK branch of a US Financial Institution.
In many cases whether or not a Financial Institution is resident in or located in the UK will be clear, but there may be situations where this is less obvious.
In these cases, HMRC will look to determine the entity’s status under the Agreement from the tax residence of the entity. If the Financial Institution is resident for tax purposes in the UK, then HMRC will regard the Financial Institution as within the scope of the UK Agreement.
For these purposes, resident for tax purposes in the UK means the following:
If an entity is a dual resident, such that it is resident in the UK and also in another country, it will still need to apply the UK legislation in respect of any Reportable Accounts maintained in the UK.
Entity Classification Elections (known as check the box elections), made to the IRS, are irrelevant for determining whether an entity is in scope for the Agreement.