[New post] [New post] [New post] Undocumented Accounts


Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value A”

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

[New post] [New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear”

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

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

| Categories: GATCA

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[New post] Undocumented Accounts

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Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear”

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

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

https://haydonperryman.com/gb/guidance/dac/aeim102880/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

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Haydon Perryman, CGMA | February 12, 2016 at 1:11 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value A"

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

[New post] [New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear"

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

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

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Undocumented Accounts

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Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

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

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Undocumented Accounts

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

| Categories: GATCA

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[New post] Undocumented Accounts

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear"

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

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

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

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Undocumented Accounts

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Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder. 

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as: 

  • A US Specified Person for FATCA,
  • A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and
  • An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification 

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market. 

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts. 

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures. 

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature. 

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –
  • name;
  • residence address;
  • jurisdiction(s) of residence for tax purposes – see;
  • TIN with respect to each Reportable Jurisdiction (see above); and
  • date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS). 

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records. 

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request. 

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

125. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where the indicia search is completed (see below) and the only indiciafound is a “hold mail” or “in-care-of” address and no other address is found, thenspecial procedures apply (the undocumented account procedures). In the order  most appropriate, theReporting Financial Institution must: complete a paper record 
search; or obtain Documentary Evidence or a self-certification from the Account 
Holder.If neitheroftheseprocedures successfully  establishes the AccountHolder’s residence for tax purposes then the Reporting Financial Institution must report the account to the tax authority as an undocumented account.

CRS p. 33
Com p. 117

https://haydonperryman.com/gb/guidance/dac/aeim102880/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance, $CRS Guidance, 90 Days, AML/KYC Procedure, Annual Review, CDD, Change in Circumstance, Curing Indicia, DAC, DAC/CRS, Dated (Self Certification), Depository Account, DoB, Documentary Evidence, Electronic Records Search, Enhanced Review Procedures, Entity Account, FATCA, FI, GATCA Teaching Notes, Gov, High Value Account, HMRC enquiries, Hold Mail or In-Care-Of Address Only, Indicia, Jurisdiction, Jurisdiction of Residence, Lower Value Account, New Individual Account, onboarding, Paper Record Search, Place and Date of Birth, Place of Birth, Pre-Existing Individual Account, Pre-populated (Self-Certification), Publicly available information, Publicly Traded, Reason to Know, Reasonableness Test, Reportable Account, Reportable Person, reporting, Reporting Financial Institution, Residence Address, Risk Based Approach, Rule Map, self certification, Self Certification for New Entity Accounts, Self Certification for New Individual Accounts, Self Certification for Pre-existing Individual Accounts, Self-Certification Format (Paper or Electronic), Signed, Tax Identification Numbers (TINs), Thresholds, TIN, Undocumented Account, Undocumented Account Procedures, US Specified Person, USD 1M
| Categories: GATCA
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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD, GATCA Teaching Notes, Jurisdiction
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Haydon Perryman, CGMA | February 12, 2016 at 1:11 am | Tags: CDD, GATCA Teaching Notes, Jurisdiction
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[New post] [New post] Validation


Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: ”

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed,”

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

[New post] Validation

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: ”

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of a”

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

Validation

by Haydon Perryman, CGMA

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $CRS Guidance , Actual Knowledge , AML/KYC Procedure , CDD , Change in Circumstance , Conflicting Information , Controlling Person , Dated (Self Certification) , DoB , Documentary Evidence , Entity Account , FIg 18 , GATCA Teaching Notes , Jurisdiction of Residence , Name , Natural Person , New Account , New Entity Account , New Individual Account , Passive NFE , Publicly available information , Reason to Know , Reasonable Explanation , Reasonableness Test , Reportable Account , Reportable Jurisdiction , Reportable Person , Residence Address , self certification , Self Certification (Minimum Requirements) , Self Certification (Unreliable) , Signed , Tax Identification Numbers (TINs) , TIN , Validation , Validity of Documentation

| Categories: GATCA

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Validation

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Haydon Perryman, CGMA posted: ”

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of a”

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

Validation

by Haydon Perryman, CGMA

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

  1. Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

  1. Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

  1. Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

  1. Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $CRS Guidance , Actual Knowledge , AML/KYC Procedure , CDD , Change in Circumstance , Conflicting Information , Controlling Person , Dated (Self Certification) , DoB , Documentary Evidence , Entity Account , FIg 18 , GATCA Teaching Notes , Jurisdiction of Residence , Name , Natural Person , New Account , New Entity Account , New Individual Account , Passive NFE , Publicly available information , Reason to Know , Reasonable Explanation , Reasonableness Test , Reportable Account , Reportable Jurisdiction , Reportable Person , Residence Address , self certification , Self Certification (Minimum Requirements) , Self Certification (Unreliable) , Signed , Tax Identification Numbers (TINs) , TIN , Validation , Validity of Documentation

| Categories: GATCA

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

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: GATCA Teaching Notes , self certification

| Categories: GATCA

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

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed,"

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

[New post] Validation

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of a"

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

Validation

by Haydon Perryman, CGMA

Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

  1. Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

  1. Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

  1. Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

  1. Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $CRS Guidance , Actual Knowledge , AML/KYC Procedure , CDD , Change in Circumstance , Conflicting Information , Controlling Person , Dated (Self Certification) , DoB , Documentary Evidence , Entity Account , FIg 18 , GATCA Teaching Notes , Jurisdiction of Residence , Name , Natural Person , New Account , New Entity Account , New Individual Account , Passive NFE , Publicly available information , Reason to Know , Reasonable Explanation , Reasonableness Test , Reportable Account , Reportable Jurisdiction , Reportable Person , Residence Address , self certification , Self Certification (Minimum Requirements) , Self Certification (Unreliable) , Signed , Tax Identification Numbers (TINs) , TIN , Validation , Validity of Documentation

| Categories: GATCA

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

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Validation

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Haydon Perryman, CGMA posted: "
Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of a"

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

Validation

by Haydon Perryman, CGMA

  1. Is the self-certification valid?

The   self-certification   can   be   provided   in   any   form   but   in   order   for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Account   Holder,   be   dated ,   and   must   include   the   Account   Holder’s:   name;  residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and   date of   birth.

Com p.   128

144.

A Reporting Financial Institution is considered to have confirmed   the reasonableness   of   a   self-certification   if   it   does   not   know   or   have   reason   to know that the self-certification is incorrect or unreliable . Where a   self-certification fails the reasonableness test the Reporting Financial Institution   is expected   to   either   obtain   a   valid   self-certification   or   a   reasonable   explanation and documentation as appropriate supporting the reasonableness of the   self-certification.

  1. Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of   Preexisting Account as set out in the context of New Individual Accounts in   this Handbook also applies to Entity Accounts. So where provided for,   some accounts   that   would   otherwise   need   to   be   treated   as   New   Accounts   can   be instead treated as Preexisting   Accounts.

Com p.   181

Due diligence procedure for New Entity   Accounts

  1. Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it   must be signed (or otherwise positively affirmed, i.e. involving some level of   active input or confirmation) by a person authorised to sign on behalf of the Entity,   be dated , and must include the Account Holder’s: name; address;   jurisdiction(s) of residence for tax purposes and   TIN(s).

Com p.   145

  1. Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be   a Reportable Account following the first part of the test, the Financial   Institution must   carry   out   the   procedure   in   relation   to   Controlling   Persons   to   identify whether additional information must also be reported or whether an   account now becomes a Reportable Account. The procedure is outlined in Figure   18 with each step described   below.

CRS p.   41

Com p.   147

Figure 18: Due diligence procedure in respect of Controlling Persons for   New Entity   Accounts

177.

Map

The self-certification can be provided in any form but in order for   it to be valid the Standard sets out that it must be signed (or otherwise   positively affirmed, i.e. involving some level of active input or confirmation) by   the Controlling Person(s) or the Entity Account Holder, be dated , and   must include the Controlling Person’s: name; residence address; jurisdiction(s)   of residence for tax purposes; TIN(s) and date of   birth.

142. Is the self-certification valid?

The self-certification can be provided in any form but in order for it to be valid the Standard sets out that it must be signed (or otherwise positively affirmed, i.e. involving some level of active input or confirmation) by the Account Holder, be dated, and must include the Account Holder’s: name; residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and date of birth.
Com p. 128

144.

A Reporting Financial Institution is considered to have confirmed the reasonableness of a self-certification if it does not know or have reason to know that the self-certification is incorrect or unreliable. Where a self-certification fails the reasonableness test the Reporting Financial Institution is expected to either obtain a valid self-certification or a reasonable explanation and documentation as appropriate supporting the reasonableness of the self-certification.

165. Due diligence procedure for New Entity Accounts.

Map

The optional provision in relation to the definition of Preexisting Account as set out in the context of New Individual Accounts in this Handbook also applies to Entity Accounts. So where provided for, some accounts that would otherwise need to be treated as New Accounts can be instead treated as Preexisting Accounts.
Com p. 181

Due diligence procedure for New Entity Accounts

169. Is the Self-certification valid?

Map

For the self-certification to be valid the Standard sets out that it must be signed (or otherwise positively affirmed, i.e. involving some level of active input or confirmation) by a person authorised to sign on behalf of the Entity, be dated, and must include the Account Holder’s: name; address; jurisdiction(s) of residence for tax purposes and TIN(s).

Com p. 145

171. Review procedure for Controlling Persons.

Map

Notwithstanding whether the account has been found to be a Reportable Account following the first part of the test, the Financial Institution must carry out the procedure in relation to Controlling Persons to identify whether additional information must also be reported or whether an account now becomes a Reportable Account. The procedure is outlined in Figure 18 with each step described below.
CRS p. 41
Com p. 147

Figure 18: Due diligence procedure in respect of Controlling Persons for New Entity Accounts

177.

Map

The self-certification can be provided in any form but in order for it to be valid the Standard sets out that it must be signed (or otherwise positively affirmed, i.e. involving some level of active input or confirmation) by the Controlling Person(s) or the Entity Account Holder, be dated, and must include the Controlling Person’s: name; residence address; jurisdiction(s) of residence for tax purposes; TIN(s) and date of birth.
Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $CRS Guidance, Actual Knowledge, AML/KYC Procedure, CDD, Change in Circumstance, Conflicting Information, Controlling Person, Dated (Self Certification), DoB, Documentary Evidence, Entity Account, FIg 18, GATCA Teaching Notes, Jurisdiction of Residence, Name, Natural Person, New Account, New Entity Account, New Individual Account, Passive NFE, Publicly available information, Reason to Know, Reasonable Explanation, Reasonableness Test, Reportable Account, Reportable Jurisdiction, Reportable Person, Residence Address, self certification, Self Certification (Minimum Requirements), Self Certification (Unreliable), Signed, Tax Identification Numbers (TINs), TIN, Validation, Validity of Documentation
| Categories: GATCA
| URL: http://wp.me/p4BlQ5-2zk

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: GATCA Teaching Notes, self certification
| Categories: GATCA
| URL: http://wp.me/p4BlQ5-2zA

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[New post] [New post] UTR


Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “11.02 – Explanation of information required

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 outl”

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

[New post] UTR

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “11.02 – Explanation of information required

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.

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

UTR

by Haydon Perryman, CGMA

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

11.02 – Explanation of information required

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CDOT Guidance , Company Registration Number , FATCA , GATCA Teaching Notes , GIIN , Reportable Information , reporting , Reporting Financial Institution , Rule Map , TIN , unique identifier , UTR

| Categories: GATCA

| URL: http://wp.me/s4BlQ5-utr

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UTR

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Haydon Perryman, CGMA posted: “11.02 – Explanation of information required

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.

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

UTR

by Haydon Perryman, CGMA

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

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

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CDOT Guidance , Company Registration Number , FATCA , GATCA Teaching Notes , GIIN , Reportable Information , reporting , Reporting Financial Institution , Rule Map , TIN , unique identifier , UTR

| Categories: GATCA

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Categories: GATCA

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "11.02 – Explanation of information required

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 outl"

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

[New post] UTR

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "11.02 – Explanation of information required

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.

"

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

UTR

by Haydon Perryman, CGMA

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

11.02 – Explanation of information required

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CDOT Guidance , Company Registration Number , FATCA , GATCA Teaching Notes , GIIN , Reportable Information , reporting , Reporting Financial Institution , Rule Map , TIN , unique identifier , UTR

| Categories: GATCA

| URL: http://wp.me/s4BlQ5-utr

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UTR

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Haydon Perryman, CGMA posted: "11.02 – Explanation of information required

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.

"

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

UTR

by Haydon Perryman, CGMA

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

11.02 – Explanation of information required

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.

102100 – Reportable Information: Reporting Financial Institution

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

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.

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

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Categories: GATCA
| URL: http://wp.me/p4BlQ5-2zF

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[New post] [New post] Undocumented Accounts


Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear”

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

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

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

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Undocumented Accounts

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Haydon Perryman, CGMA posted: “102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b”

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

https://haydonperryman.com/gb/guidance/dac/aeim102880/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

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

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: CDD , GATCA Teaching Notes , Jurisdiction

| Categories: GATCA

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Sear"

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

[New post] Undocumented Accounts

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance , $CRS Guidance , 90 Days , AML/KYC Procedure , Annual Review , CDD , Change in Circumstance , Curing Indicia , DAC , DAC/CRS , Dated (Self Certification) , Depository Account , DoB , Documentary Evidence , Electronic Records Search , Enhanced Review Procedures , Entity Account , FATCA , FI , GATCA Teaching Notes , Gov , High Value Account , HMRC enquiries , Hold Mail or In-Care-Of Address Only , Indicia , Jurisdiction , Jurisdiction of Residence , Lower Value Account , New Individual Account , onboarding , Paper Record Search , Place and Date of Birth , Place of Birth , Pre-Existing Individual Account , Pre-populated (Self-Certification) , Publicly available information , Publicly Traded , Reason to Know , Reasonableness Test , Reportable Account , Reportable Person , reporting , Reporting Financial Institution , Residence Address , Risk Based Approach , Rule Map , self certification , Self Certification for New Entity Accounts , Self Certification for New Individual Accounts , Self Certification for Pre-existing Individual Accounts , Self-Certification Format (Paper or Electronic) , Signed , Tax Identification Numbers (TINs) , Thresholds , TIN , Undocumented Account , Undocumented Account Procedures , US Specified Person , USD 1M

| Categories: GATCA

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

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Undocumented Accounts

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Haydon Perryman, CGMA posted: "102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may b"

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

Undocumented Accounts

by Haydon Perryman, CGMA

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder.

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as:

A US Specified Person for FATCA, A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040 ) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone . There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis . If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented account s.

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature.

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –

name; residence address; jurisdiction(s) of residence for tax purposes – see; TIN with respect to each Reportable Jurisdiction (see above); and date of birth. The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS).

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records.

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request.

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460 ).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

  1. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where   the   indicia   search   is   completed   (see   below)   and   the   only   indicia found   is   a   “hold   mail”   or   “in-care-of”   address   and   no   other   address   is   found,   then special   procedures   apply   (the   undocumented   account   procedures ).   In   the   order    most   appropriate,   the Reporting   Financial   Institution   must:   complete   a   paper   record

search;   or   obtain   Documentary   Evidence   or   a   self-certification   from   the   Account

Holder. If neither of these procedures successfully   establishes   the   Account Holder’s   residence   for   tax   purposes   then   the   Reporting   Financial   Institution   must   report the account to the tax authority as an undocumented   account.

CRS p.   33

Com p.   117

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

102880 – Due Diligence: Pre-Existing Individual Accounts: Lower Value Accounts: Electronic Record Search: Curing Indicia

There may be occasions when the electronic record search gives indications of residence in a Reportable Jurisdiction that the financial institution considers may be incorrect. In such circumstances the financial institution may take steps to ‘cure’ the information before treating the Account Holder as a Reportable Person.

Where the financial institution holds information about the Account Holder that includes any of

a. A current mailing address in a Reportable Jurisdiction,

b. One or more telephone numbers in a Reportable Jurisdiction (and, for DAC/CRS, no telephone number in the jurisdiction of the reporting FI),

c. Standing instructions, to transfer funds to an account maintained in a Reportable Jurisdiction (other than a Depository Account in the case of the DAC/CRS), or

d. A currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction, thenthe financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence.

the financial institution must obtain a self-certification from the Account Holder to establish the jurisdiction of residence. The financial institution can rely on self-certifications it has previously reviewed and maintained a record of, but, in either case, the self-certification must be supported by Documentary Evidence. If the self-certification supported by Documentary Evidence establishes that the Account Holder is not a Reportable Person, then the financial institution is not required to treat the Account Holder as a resident in a Reportable Jurisdiction.

The self-certification obtained as part of the curing procedure does not need to contain a definitive confirmation that an Account Holder is not resident in a particular jurisdiction. Provided the self certification positively identifies the jurisdictions where the Account Holder is resident it can be taken that the Account Holder is not resident in any other jurisdiction.

Where a financial institution has contacted an Account Holder for a self certification but the Account Holder has not responded, the account should be treated as undocumented 90 days after initiating contact. The 90 day period is to allow the Account Holder sufficient time to respond to the request for information. In such circumstances, the financial institution must contact the Account Holder at least annually to obtain the self-certification.

The information in d. above may arise in circumstances where the Account Holder cannot provide a self-certification. In such a case, the financial institution may rely on Documentary Evidence that establishes the Account Holder’s non-reportable status.

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103040/

103040 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Hold Mail or In-Care-Of Address Only

If a hold mail instruction or in-care-of address is discovered in the enhanced review of High Value Accounts, and no other address or indicia of residence are identified for the Account Holder, the financial institution must request a self-certification or other Documentary Evidence from the Account Holder to establish the jurisdiction of tax residence of the Account Holder. 

If the financial institution cannot obtain a self-certification or Documentary Evidence from the Account Holder the financial institution is required to treat the Account Holder as: 

  • A US Specified Person for FATCA,
  • A Reportable Person for all four territories under the reciprocal Crown Dependences and Overseas Territories agreements, and
  • An undocumented account for DAC/CRS.

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103100/

103100 – Due Diligence: Pre-Existing Individual Accounts: High Value Accounts: Undocumented Account

An undocumented account exists where the conditions (at AEIM103040) exist, that is, the only indicators that the financial institution hold are a hold mail or in-care-of address and the financial institution has been unable to obtain a self-certification from the Account Holder to cure the information held.

Where the financial institution has identified and reported an account as an undocumented account, the financial institution must repeat the enhanced review for high-value individual accounts annually until the account ceases to be undocumented.

103140 – Due Diligence: New Individual Accounts: Self-Certification

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103140/

103140 – Due Diligence: New Individual Accounts: Self-Certification

Upon account opening, the reporting financial Institution must obtain a self-certification 

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances where, exceptionally, it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market. 

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts. 

There is no prescribed format for a self-certification but it may, for example, form part of the account opening documentation. Whatever form it takes, it must allow the Reporting Financial Institution to determine the Account Holder’s residence(s) for tax purposes and whether s/he is a US citizen, and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures. 

The self-certification must also include the Account Holder’s tax identification number and date of birth.

A self-certification must be signed by the Account Holder (or a person authorised to do so for her/him under domestic law), or in the case of an account opened by telephone or the internet the self-certification must be positively affirmed – that is, the Account Holder must confirm the information provided. The self-certification must be dated no earlier than the date the Account Holder received the form; undated self-certifications may be date stamped by the receiving financial institution on receipt and that date will be taken as the date of signature. 

Self-certifications may take a two stage process so that, if it is established that an Account Holder is a UK tax resident and not tax resident elsewhere or a US citizen, then it will not be necessary to gather further information beyond the first three bullet points below. Otherwise, self-certifications must include all of the following information for the Account Holder –
  • name;
  • residence address;
  • jurisdiction(s) of residence for tax purposes – see;
  • TIN with respect to each Reportable Jurisdiction (see above); and
  • date of birth.

The self-certification does not need to include the place of birth of the Account Holder even where the reporting financial institution is otherwise required to obtain and report it under domestic law. This is because if that information is already required to be reported it will be held by the financial institution (and, if held in an electronically searchable form, must be then also be reported for DAC/CRS). 

The self-certification may be pre-populated by the reporting financial institution to include the Account Holder’s information, except for the jurisdiction(s) of residence for tax purposes, to the extent already available in its records. 

The self-certification may be provided in any manner and any form, for example, it can be in paper or electronic format. If the self-certification is provided electronically, the Financial Institution must have systems in place to ensure that the information provided is that of the Account Holder and it must be able to provide a hard copy of all such self-certifications to HMRC on request. 

Where an Account Holder provides a paper self-certification, a financial institution may retain an original, certified copy, or photocopy (including a microfiche, electronic scan, or similar means of electronic storage) of the self-certification. Any documentation that is stored electronically must be made available by the financial institution in hard copy form to HMRC upon request.

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Source URL: https://haydonperryman.com/gb/guidance/dac/aeim103440/

103440 – Due Diligence: Entity Accounts: Determining Whether the Entity is a Reportable Person

Where a New Entity Account is held by one or more Entities that are Reportable Persons, then the account must be treated as a Reportable Account.

Self-certification

To determine this, financial institutions must obtain a self-certification as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected under AML/KYC Procedures. In practice, this means the financial institution must not know or have reason to know that the self-certification is incorrect or unreliable if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the DAC/CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes (see AEIM103460).

For New Entity Accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for Pre-existing Entity Accounts.

Timing of self-certification

It is expected that financial institutions will maintain account opening processes that facilitate the collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone. There may be circumstances, however, where it is not possible or practical to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market.

In such circumstances, it is expected that the self-certification should be obtained within a period of 90 days or such reasonable time as the circumstances dictate. Financial institutions must make proper endeavours to obtain the self-certification in these circumstances, including issuing follow-up letters on at least an annual basis. If an Account Holder fails to respond then, there is no need to close the account but it should be reported as undocumented. HMRC may make enquiries if particular financial institutions appear to have a disproportionate number of undocumented accounts.

Information in the financial institution’s possession or that is publicly available

The due diligence procedures provide an exception to the requirement to obtain a self-certification where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example, such information may show that the entity is, in fact, a corporation that is publicly traded or a Governmental Entity.

Where a self-certification is obtained, and it indicates that the Account Holder is resident in a Reportable Jurisdiction, the financial institution must treat the account as a Reportable Account. Again, an exception applies where the financial institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person concerning such Reportable Jurisdiction.

Note that financial institutions are not obliged to rely on these exceptions and they may insist on self-certifications being provided.

This can be summarised in the following diagram (© OECD).

125. Was the only indicia found during the indicia search a “hold mail” or “in-care- of” address?

Map

Where the indicia search is completed (see below) and the only indiciafound is a “hold mail” or “in-care-of” address and no other address is found, thenspecial procedures apply (the undocumented account procedures). In the order  most appropriate, theReporting Financial Institution must: complete a paper record 
search; or obtain Documentary Evidence or a self-certification from the Account 
Holder.If neitheroftheseprocedures successfully  establishes the AccountHolder’s residence for tax purposes then the Reporting Financial Institution must report the account to the tax authority as an undocumented account.

CRS p. 33
Com p. 117

https://haydonperryman.com/gb/guidance/dac/aeim102880/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $AEoFI Guidance, $CRS Guidance, 90 Days, AML/KYC Procedure, Annual Review, CDD, Change in Circumstance, Curing Indicia, DAC, DAC/CRS, Dated (Self Certification), Depository Account, DoB, Documentary Evidence, Electronic Records Search, Enhanced Review Procedures, Entity Account, FATCA, FI, GATCA Teaching Notes, Gov, High Value Account, HMRC enquiries, Hold Mail or In-Care-Of Address Only, Indicia, Jurisdiction, Jurisdiction of Residence, Lower Value Account, New Individual Account, onboarding, Paper Record Search, Place and Date of Birth, Place of Birth, Pre-Existing Individual Account, Pre-populated (Self-Certification), Publicly available information, Publicly Traded, Reason to Know, Reasonableness Test, Reportable Account, Reportable Person, reporting, Reporting Financial Institution, Residence Address, Risk Based Approach, Rule Map, self certification, Self Certification for New Entity Accounts, Self Certification for New Individual Accounts, Self Certification for Pre-existing Individual Accounts, Self-Certification Format (Paper or Electronic), Signed, Tax Identification Numbers (TINs), Thresholds, TIN, Undocumented Account, Undocumented Account Procedures, US Specified Person, USD 1M
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Haydon Perryman, CGMA posted: “Haydon Perryman, CGMA posted: “02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial I”

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

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by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: “02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institu”

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

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by Haydon Perryman, CGMA

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures. For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity. e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK. Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 , For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts. However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person, will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures.

For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity.

e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK.

Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 ,

For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts.

However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person,

will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

02.13 – Local Client Base Financial Institutions

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $UK IGA Guidance , 98% , Collective Investment Scheme , GATCA Teaching Notes , Investment Trust , Local Client Base FI , Rule Map , VCT

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Haydon Perryman, CGMA posted: “02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institu”

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

VCT

by Haydon Perryman, CGMA

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures. For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity. e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK. Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 , For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts. However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person, will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures.

For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity.

e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK.

Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 ,

For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts.

However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person,

will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

https://haydonperryman.com/gb/guidance/fatca/02-13/

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $UK IGA Guidance , 98% , Collective Investment Scheme , GATCA Teaching Notes , Investment Trust , Local Client Base FI , Rule Map , VCT

| Categories: GATCA

| URL: http://wp.me/s4BlQ5-vct

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Haydon Perryman, CGMA | February 12, 2016 at 1:02 am | Tags: $UK IGA Guidance , GATCA Teaching Notes

| Categories: GATCA

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Haydon Perryman, CGMA posted: "Haydon Perryman, CGMA posted: "02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial I"

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

[New post] VCT

by Haydon Perryman, CGMA

Haydon Perryman, CGMA posted: "02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institu"

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

VCT

by Haydon Perryman, CGMA

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures. For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity. e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK. Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 , For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts. However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person, will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures.

For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity.

e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK.

Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 ,

For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts.

However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person,

will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

02.13 – Local Client Base Financial Institutions

Haydon Perryman, CGMA | February 12, 2016 at 12:52 am | Tags: $UK IGA Guidance , 98% , Collective Investment Scheme , GATCA Teaching Notes , Investment Trust , Local Client Base FI , Rule Map , VCT

| Categories: GATCA

| URL: http://wp.me/s4BlQ5-vct

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Haydon Perryman, CGMA posted: "02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institu"

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

VCT

by Haydon Perryman, CGMA

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures. For insurance products the following reporting or taxing regimes will apply to this section:

Chargeable events reporting regime. Income minus Expense Regime (I-E). Basic rate tax deducted from the interest portion of a Purchased Life Annuity. e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK), a Non-Participating Financial Institution, or any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK. Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000 , except that it also includes any UK resident company that is:

an Investment Trust for the purposes of the Corporation Taxes Acts (see Section 1158 of the Corporation Tax Act 2010 ), a Venture Capital Trust within the meaning of Part 6 of the Income Tax Act 2007 , For the purposes of the Agreement, Investment Entity includes the following types of entities:

Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000. closed ended investment companies fund managers investment managers fund administrators transfer agents depositories, and trustees of Unit Trusts. However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

a Collective Investment Scheme or a manager or operator of a Collective Investment Scheme that is not constituted as a person, will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals · Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

02.13 – Local Client Base Financial Institutions

02.13 – Local Client Base Financial Institutions

There are ten criteria that must all be met before a Financial Institution can be treated as a Local Client Base Financial Institution. A Financial Institution should self-assess whether it meets these criteria and maintain appropriate records to support its self-assessment. The criteria are listed below:

a) The Financial Institution must be licensed and regulated under the laws of the UK. For example, this would include where a Financial Institution is an Authorised Person under Section 31 FSMA 2000 or where closed ended investment companies qualify as an Investment Trust Company under s1158 of the Corporation Tax Act 2010, or as a Venture Capital Trust under part 6 Income Tax Act 2007.

b) The Financial Institution must have no fixed place of business outside the UK other than where the location outside of the UK houses solely administrative functions and is not publically advertised to customers.

This applies even if the fixed place of business is within a jurisdiction that has entered into an Agreement with the US concerning FATCA.

c) The Financial Institution must not solicit potential Financial Account holders outside the UK. For this purpose, a Financial Institution shall not be considered to have solicited such customers outside the UK merely because it operates a website, provided that the website does not specifically indicate that the Financial Institution provides accounts or services to non-UK residents or otherwise target or solicit US customers.

A Financial Institution will also not be considered to have solicited potential Financial Account holders outside the UK if it advertises in either print media or on a radio or television station and the advertisement is distributed or aired outside the UK, as long as the advertisement does not specifically indicate that the Financial Institution provides services to non-residents. Also, a Financial Institution issuing a prospectus will not, in itself, amount to soliciting Financial Account holders, even when it is available to US Persons in the UK. Likewise, publishing information such as Reports and Accounts to comply with the Listing Rules, Disclosure Rules and Transparency or AIM rules to support a public listing or quotation of shares will not amount to soliciting customers outside the UK.

d) The Financial Institution is

  • required under the tax laws of the UK to perform information reporting, such as the reporting required under Schedule 23 FA 2011 or the withholding of tax with respect to accounts held by residents of the UK, or
  • is required to identify whether account holders are resident in the UK as part of the AML/KYC procedures.

For insurance products the following reporting or taxing regimes will apply to this section:

  • Chargeable events reporting regime.
  • Income minus Expense Regime (I-E).
  • Basic rate tax deducted from the interest portion of a Purchased Life Annuity.

e) At least 98 per cent of the Accounts by value, provided by the Financial Institution must be held by people who reside in the UK or another Member State of the European Union.

The 98 per cent threshold can include the Accounts of US Persons if they are resident within the UK. It applies to both Individual and Entity Accounts.

A Financial Institution will need to assess whether it meets this criterion annually. The measurement can be taken at any point of the preceding calendar year for it to apply to the following year, as long as the measurement date remains the same from year to year.

f) Subject to subparagraph g) below, beginning on 1 July 2014, the Financial Institution does not provide Financial Accounts to:

  • any Specified US Person, who is not a resident of the UK (including a US Person that was a resident of the UK when the account was opened, but subsequently ceases to be a resident of the UK),
  • a Non-Participating Financial Institution, or
  • any Passive NFFE with Controlling Persons who are US citizens or resident for tax purposes who are not resident in the UK.

Where a Local Client Base Financial Institution provides Financial Accounts to US citizens who are resident in the UK, these Financial Accounts do not need to be reported to HMRC unless the account holder subsequently ceases to be a resident of the UK.

g) On or before 1 July 2014, the Financial Institution must implement policies and procedures to establish and monitor whether it provides (meaning opens and maintains) Financial Accounts to the persons described in subparagraph (f) above. If any such Financial Account is discovered, the Financial Institution must either report that account as though the Financial Institution were a Reporting UK Financial Institution, or close the account, or transfer the account to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution.

This means that even if Financial Accounts have been provided to Specified US Persons, a Non-Participating Financial Institution or any Passive NFFE with Controlling Persons who are US citizens or residents prior to the 1 July 2014, the Financial Institution can still be a Financial Institution with a Local Client Base provided that the appropriate reporting is carried out.

h) With respect to each Financial Account that is held by an individual who is not a resident of the UK or by an entity, and that is opened prior to the date that the Financial Institution implements the policies and procedures described in subparagraph (g) above, the Financial Institution must review those accounts in accordance with the procedures applicable to Pre-existing Accounts, described in Annex I of the Agreement, to identify any US Reportable Account or Financial Account held by a Non-Participating Financial Institution. Where such accounts are identified, they must be closed, or transferred to a Participating Foreign Financial Institution, Reporting Model 1 Foreign Financial Institution or a US Financial Institution or the Financial Institution must report those accounts as if it were a Reporting UK Financial Institution.

This allows a Financial Institution with a Local Client Base to maintain its status while reporting on relevant Financial Accounts that were opened before the adoption of the requirements set out in this section. This means that where a Local Client Base Financial Institution has a reportable account then it is required to Register and report (or close) the account.

i) Each Related Entity of the Financial Institution, where the Related Entity is itself a Financial Institution must be incorporated or organised in the UK and must also meet the requirements for a Local Client Base Financial Institution with the exception of a retirement plan classified as an Exempt Beneficial Owner.

j) The Financial Institution must not have policies or practices that discriminate against opening or maintaining accounts for individuals who are Specified US Persons and who are residents of the UK.

02.31 – Collective Investment Schemes

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-31/

02.31 – Collective Investment Schemes

References in this Guidance to Collective Investment Scheme, unless otherwise specified, should be read as defined in the UK Regulations. This broadly has the same meaning as it has for the purpose of the Financial Services and Markets Act 2000, except that it also includes any UK resident company that is:

For the purposes of the Agreement, Investment Entity includes the following types of entities:

  • Collective Investment Schemes within the meaning in the Financial Services and Markets Act 2000.
  • closed ended investment companies
  • fund managers
  • investment managers
  • fund administrators
  • transfer agents
  • depositories, and
  • trustees of Unit Trusts.

However, the only Financial Accounts that are relevant to the Agreement are the Equity and Debt Interests in Collective Investment Schemes.

The UK Regulations state that where the Investment Entity is a Collective Investment Scheme constituted by a person, only the Collective Investment Scheme will have reporting responsibilities in relation to the Financial Accounts (the Equity and Debt Interests) of that Collective Investment Scheme.

For example, a fund administrator or a trustee of a Unit Trust will not be a Reporting Financial Institution by virtue of acting for a Collective Investment Scheme. (However, by exception, a fund manager may be regarded as a Reporting Financial Institution by virtue of Regulation 3(6) where it acts on behalf of a Collective Investment Scheme that is not constituted by a person, for example, a Unit Trust.)

Therefore any Investment Entity other than:

  • a Collective Investment Scheme
  • or a manager or operator of a Collective Investment Scheme that is not constituted as a person,

will not have any reporting responsibilities in relation to the interests in the Collective Investment Scheme.

Nevertheless, an entity may have reporting responsibilities if it maintains Financial Accounts other than those of the Collective Investment Scheme – see the section on fund distributors below.

02.35 – Identification and reporting on interest in a Collective Investment Scheme

Source URL: https://haydonperryman.com/gb/guidance/fatca/02-35/

02.35 – Identification and reporting on interest in a Collective Investment Scheme

The diagram below illustrates how HMRC believes the account identification and reporting obligations under the Regulations should work for Collective Investment Schemes.

Depending on how the fund is structured, various entities may fall within the definition of Investment Entity. However, as set out at 2.32 above, provided the fund is a Collective Investment Scheme, only the fund has obligations under the Regulations. The fund itself will need to determine which entity carries out the obligations to identify, verify and report on account holders that are Specified US Persons, by reference to its own governance structure and contractual arrangements.

Example 1

Authorised funds in the UK (which are Authorised Unit Trusts, Open-Ended Investment Companies, and Tax-Transparent Funds) are required to have a fund manager that acts as the operator of the fund and is normally assigned responsibility for fulfilling the regulatory obligations of the fund.

Therefore, the fund manager will normally have responsibility for compliance with the obligations about the Financial Accounts of the Fund under the UK legislation. In turn, fund operators typically use third party service providers to provide fund administration, including maintaining records of investors, account balances and transaction services provided by the transfer agent. In these cases, the fund manager might appoint the third party service provider to fulfil account identification and reporting requirements as they will have the necessary records.

The fund’s account identification and reporting obligations apply only to its immediate account holders. It is required to identify all direct individual account holders under the due diligence obligations outlined in this Guidance. Any indirect individual account will be held through a Financial Institution (for example a platform or other nominee), and the fund’s obligation is to identify the direct account holder (such as the Financial Institution) only. In turn, the intermediary Financial Institution will have its own obligation to identify and report on its account holders.

In the diagram, the fund would only need to identify any direct individual account holders (shown on the left-hand side), and the Financial Institutions on the share register. It would be required to report information on any of these that are Specified US Persons.

In turn Custodial Institutions that act as distributors (and not the fund) would be required to identify and report on their direct account holders. The Fund has no obligation to identify and report on accounts held indirectly through other Financial Institutions.

Investment Trust Companies (ITC’s) and Venture Capital Trusts (VCT’s)

 ITC’s and VCT’s are classified in the Regulations as Investment Entities.

Although the ITC or VCT will be a Reporting UK Financial Institution, it will not generally need to report on its shares and securities that are regularly traded on an established securities market as these will not be Financial Accounts. Accordingly, in many scenarios it will simply need to file a nil return with HMRC unless it maintains other Financial Accounts. For further guidance on “regularly traded on an established securities market” please see Section 3.10.

To be treated as a VCT or ITC, the entity must be approved by HMRC for the general purpose of either the Venture Capital Trust scheme or, in relation to ITC’s, meet the conditions in section 842 ICTA 1988.

Guidance on the requirements for approval required by HMRC can be found in the following HMRC Manuals
· Re VCT’s: http://www.hmrc.gov.uk/manuals/vcmmanual/index.htm

· Re ITC’s: http://www.hmrc.gov.uk/manuals/ctmanual/CTM47110.htm

ITC and VCT shares and securities are invariably listed on the London Stock Exchange and so, subject to the conditions set out in Section 3.10 should meet the requirement of “regularly traded on an established securities market” and will not constitute “Financial Accounts”.

Where an ITC is in a members voluntary liquidation, it will be deemed to meet the regularly traded condition providing no new investments are made.

https://haydonperryman.com/gb/guidance/fatca/02-13/