Common Reporting Standard

The Common Reporting Standard (CRS) was introduced by the OECD to facilitate the automatic exchange of information between jurisdictions. Over 100 countries have signed up and they are already exchanging significant quantities of information.
The CRS requires all relevant financial institutions to identify the “controlling person” (which can include the named account holder, any 25%+ natural shareholder in a corporate entity, the settlor of a trust or the trustee, protector or beneficiary of a trust). They are then required to report information to that person’s country of residency.
Clearly, there is a concern that this may not be the correct or current country of residency for tax purposes.
The information that will be shared will be significant, for example:
- The name, address, date of birth and tax identification number of the controlling person and/or account holder,
- The account number,
- The account balance as at various points in time,
- Any income generated by the account,
- The gross proceeds of any sale of assets, and/or
- Any other notable payments received or made.
Some of which may not have been reported to the relevant tax authorities (possibly because there is no current obligation if, for example, the taxpayer is non-UK domiciled). CRS will undoubtedly give the authorities more information than they are currently able to obtain.
There is also a concern that there may be multiple reporting of the same information, not to mention the clear potential data protection issues as information is passed around the world. Following the “Panama Papers” and “Paradise Papers”, this may be considered an information goldmine.
With the advent of the “Failure to Correct” penalty regime, it is highly important that clients undertake a review of their international tax affairs. HMRC are receiving significantly more information than they have ever done previously and complex structures, previously unreported, could be viewed in an unfavourable light without prior explanation.
If you have any concerns regarding an account or overseas asset/structure then it is important to speak to a specialist as soon as possible. It is far better to voluntarily approach HMRC with an explanation or disclosure rather than wait for them to receive the information as this can help mitigate penalties, reduce the likelihood of prosecution and help protect your reputation.
HOW CAN HAMILTON ROSE HELP?
Hamilton Rose have 30 years of combined experience dealing with reviews of clients’ affairs and, where necessary, making voluntary disclosures. We know the information HMRC are likely to obtain under CRS and we know how to mitigate the potential associated risks.
We appreciate that making a voluntary disclosure is often the first time that a client/their adviser has approached HMRC and that it can be a nerve-wracking experience. We will ensure that you are fully supported throughout the process and give you peace of mind that any historic UK tax inaccuracies are fully resolved and that your best interests and assets are protected.
Once matters are resolved, we can also assist with any UK tax compliance obligations going forward to ensure that you remain fully protected against any potential allegations by HMRC.