29.1 Financial Institutions are required under Finance Act 2013, s. 222 (International agreements to improve tax compliance) and the International Tax Compliance Regulations 2015 (SI 2015/878), to carry out due diligence and reporting obligations in respect of:
· arrangements between the UK and another territory for the exchange of tax information for the purposes of the adoption and implementation of the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-Operation and Development (OECD); and
· the agreement between the UK and the USA to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA).
29.2 Under the regulations, Financial Institutions are required to collect and maintain information about the residence, and in the case of the USA the citizenship as well, of individuals and entities for whom they maintain financial accounts, and to report information to HMRC.
29.3 The firm may offer corporate trustee services as a Financial Institution and so will have responsibility for compliance with the CRS and FATCA requirements for those trusts for which it provides a corporate trustee service.
Most other firms will not be Financial Institutions, but may have clients that are Financial Institutions.
29.4 Other Financial Institutions will require their clients to verify their tax residence for CRS and tax status under FATCA.
29.5 If any member of the firm acts as a trustee, or the firm itself is a corporate trustee, the firm may have responsibility for compliance with the Regulations.
29.6 Further guidance can be obtained from the HMRC, OECD and IRS websites.
Effective Date: 24 July 2025