Financial information is increasingly transparent globally.
The Common Reporting Standard (CRS) is a coordinated international approach to facilitate exchange of financial information globally.
Over 100 countries have now signed up and have agreed to supply information annually.
Bankers, Trustees, brokers and others will be obliged to make returns under the CRS.
What the CRS means to you
All types of offshore investment income will be reported to the customers ‘home’ tax territory (including bank interest, dividends, income from annuities and other insurance products) together with account balances and proceeds from the sale of financial assets.
Financial institutions will look through nominee entities such as offshore companies, trusts, foundations and anstalts and report on the relevant ‘controlling persons’ and/or beneficial persons.
When it comes into force
It is happening now.
the first reports will be issued by financial institutions in the early adopter countries by September 2017.
the late adopters to follow by September 2018 at the latest.
Impact of the CRS
On receipt of the CRS data, the UK tax authorities will ask questions, perhaps opening investigations and writing to everyone they have received information about.
This means every account holder, regardless of their tax residence or domicile status, will need to demonstrate that they are UK tax compliant.
How we can help
If there is something to disclose, you must make a voluntary disclosure with the help of a specialist before it is too late to secure the best financial outcome.
New ‘failure to correct’ penalties of up to 300% (with a minimum of 100%) of the tax due may be charged which could far out-weigh the tax itself.
Benefits of making an early disclosure
Voluntary disclosure of unpaid or underpaid taxes will result in:
lower professional costs
in serious cases, allow for negotiation for protection against criminal prosecution.