Closed Account

An account is regarded as closed according to the normal operating procedures of the reporting financial institution that are consistently applied for all accounts that it maintains. For example, an equity interest in an investment entity would be considered closed when that interest is terminated by the transfer, surrender, redemption or cancellation of the interest or the liquidation of the entity. The information to be reported when an account is closed depends on the regime under which the report is made. An account with a balance or value equal to zero or which is negative will not be a closed account solely by reason of such a balance or value. FATCA & CDOT Reporting The process for closing accounts will differ between institutions and between different products and accounts. The intention is to capture the amount withdrawn from the account in connection with the closure process, as opposed to the account balance at the point of closure given there is an expectation the balance will be reduced prior to point of closure. For these purposes it is acceptable for the Financial Institution to:

  • record the balance or value within five business days of when they receive instructions from the Account Holder to close the account; or
  • record the most recent available balance or value that is obtainable following receipt of instructions to close the account, where a Financial Institution is unable to record the balance or value at the time of receiving instructions to close the account. This may include a balance or value that predates the instructions to close the account if this is the balance or value that is the most readily available. For accounts that close as a result of switching to another bank, the balance calculated as the transferable balance as part of the BACs Account Switching service. DAC Reporting When an account is closed the reporting financial institution must report the fact of the closure but is not required to report the balance or value of the account at closure. Any reportable amounts paid or credited to the account in the reporting period up to the date of closure remain reportable.