HM Revenue & Customs (HMRC) released guidance relating to the automatic exchange of financial account information, and clarifying that a “wider approach”—that is, gather and store information on all tax residencies—can be used by UK financial institutions. This guidance is secondary to the Common Reporting Standard (CRS) commentary which will be used to interpret the EU Directive on Administrative Cooperation.
A 2015 statutory instrument permits financial institutions to gather information on the tax residency of account holders—irrespective of whether or not that account holder is a reportable person—and to retain that information for six years. Also, the position of HMRC is that the 2015 statutory instrument provides data protection cover for financial institutions to comply with those obligations, thus providing a clear view on the use of the wider approach in the UK.
The HMRC guidance also clarifies rules for UK holding companies that are owned by financial institutions (such as private equity funds), as to when they are managed investment entities—i.e., financial institution must have discretionary authority to manage the entity’s assets either in whole or in part. Because ownership of an entity is not the same as control of the assets, this could reduce the number of financial institutions in the UK.
HM Revenue & Customs (HMRC) released a summary of responses to possible changes to how HRMC applies penalties.
The February 2015 discussion document—HMRC Penalties: a Discussion Document—was released for comments on how changes could be made to the manner that penalties are applied as HMRC starts to deliver more digital services. The discussion document proposed five broad principles for any new penalty regime and posed 12 questions for discussion.
In general, there has been general agreement to the five principles set out in the discussion document (which are broadly similar to those that were outlined during an initial HMRC evaluation of the current penalty regime).
Read a September 2015 report prepared by the KPMG member firm in the UK: Weekly Tax Matters (25 September 2015)
Other topics discussed in the KPMG report include:
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