show menu
Close

Important information regarding changes to the Common Reporting Standard

 

Posted on 21 August 2017

The Common Reporting Standard, otherwise known as the CRS, is a global information standard for the automatic exchange of tax and financial information, and is intended to prevent tax evasion.

Implemented in 2014, the CRS has undergone several modifications and introduced new legislation. Most recently, it’s been declared that financial institutions and professionals who have advised clients on offshore matters must now write to clients, making them aware of the CRS and providing them with the option of voluntary disclosure.

It is now mandatory that if you have provided advice to clients regarding offshore matters, including individuals or trusts that own overseas assets or income from 1 October 2015 to 30 September 2016 where you have not submitted their tax returns incorporating these two periods, then you must now contact said clients.

This must be adhered to by 31st August 2017.

This includes situations where offshore advice or services have been provided, but where you have not prepared the individual’s UK tax return; or, where you have referred the individual to a connected person outside the UK for the provision of advice or services relating to their personal tax affairs.

Further examples of situations include:

  • Advising a UK resident individual in respect to reviewing their tax residency and, potentially, taking steps to change residency;
  • Providing IHT planning advice where the individual is UK resident, has overseas assets and for whom you do not prepare their tax return;
  • Individuals who you have been advising who have overseas assets but who have yet to file their 2015/16 tax return;
  • Advice for family succession planning where a review of their assets identifies foreign assets / income.

If such advice has been provided, a letter must now be sent to clients alerting them to the Common Reporting Standard, and the availability of voluntary disclosure facilities. By doing so, it provides clients with the opportunity to declare income or gains not previously declared, prior to HMRC opening an enquiry.

It is of paramount importance that financial institutions and professionals now write to their clients. If an institution or professional fails to do so, strict penalties will be imposed.

Ultimately, compliance is key. If you would like any further information regarding the CRS, or recent changes to the legislation, please do not hesitate to contact Jackie Hendley, Head of Tax at Smith Cooper.

 

Share on Twitter Share on Google+ Share on Linkedin