The regulations apply to financial institutions and those who provide advice or services to individuals relating to offshore accounts, income or assets.
On 8 September 2016 the UK’s International Tax Compliance (Client Notification) Regulations were released and came into force on 30 September 2016. The regulations amend the International Tax Compliance Regulations 2015 by requiring financial institutions and certain advisors to identify individuals to whom notifications, as outlined in the regulations, must be sent on or before 31 August 2017 (along with a covering letter from the financial institution/advisor using set wording provided by HMRC and the relevant links to guidance).
The Regulations apply to financial institutions and to individuals and companies who, as part of their business, provide advice or services to individuals relating to offshore accounts, income or assets. Financial institutions are defined in the same way as under the Common Reporting Standard (including banks, building societies, insurers, fund managers, wealth managers and certain trusts), however it excludes non-reporting financial institutions and financial institutions with charitable or other non-profit purposes.
Unusually HMRC have included a prescribed form of the notification as well as specifying certain statements that should accompany the prescribed form. They have also given further details on the requirements that apply to financial institutions and advisors, and penalties for non-compliance.
For more information, KPMG in the UK have prepared a detailed note which can be found here.
This Statutory Instrument has a significant impact on UK tax advisers and headquartered financial groups, however, in effect it does not impact UK branches of non-UK financial groups.
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