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Common Reporting Standard

Financial information is increasingly transparent globally.

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  • The Common Reporting Standard (CRS) is a coordinated international approach to facilitate exchange of financial information globally.
  • Over 100 countries have agreed to supply information automatically each year.
  • 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 and foundations  and report on the relevant ‘controlling persons’ and/or beneficial persons.

When it comes into force

  • It is happening now.
  • the first reports were issued by financial institutions in the early adopter countries by September 2017.
  • the late adopters followed by September 2018.

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 that potentially 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 with as few years as possible being taxed.
  • New ‘failure to correct’ penalties of up to 300% (or more in certain scenarios) of the tax due may be charged which could far out-weigh the tax itself. We can help reduce that penalty, the minimum possible is 100% of the tax but that is a lot better than 200% or 300%.
Benefits of making an early disclosure

Voluntary disclosure of unpaid or underpaid taxes will result in:

  • lower professional costs
  • lower penalties
  • in serious cases, allow for negotiation for protection against criminal prosecution.

Contact us

Sean Wakeman
Sean Wakeman
Partner, Head of Tax Resolutions
John Cassidy
John Cassidy
Partner, Tax Resolutions