06.01 – Threshold Exemptions that apply to New Individual Accounts

Under the UK legislation, a Financial Institution is required to identify and report all Reportable Accounts. The Agreement is written to provide for exemptions to apply to certain accounts based on thresholds subject to an election to remove them. The UK legislation reverses this requirement meaning that no thresholds apply unless a Financial Institution elects to apply the appropriate threshold exemptions set out in the Agreement when reviewing and identifying Pre-existing Individual Accounts.

The election can apply to all Financial Accounts or a clearly identifiable group of accounts, such as accounts held by a line of business.

The form the election will take and rules governing such elections are yet to be finalised, and HMRC will consult with business on the most suitable approach.

The threshold exemptions for New Individual Accounts are:

  • Depository Accounts do not need to be reviewed, identified or reported unless the account balance exceeds $50,000.
  • Cash Value Insurance Contracts do not need to be reviewed, identified or reported unless the cash value exceeds $50,000.

If a Financial Institution does not make an election under the Regulations to apply the threshold exemptions to Reportable Accounts, then it will need to review and identify the status of all of its New Individual Account holders.