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28.01.2016 02:49 Age: 2 days

UK tax authority asks for views on CRS client notification regulations

HM Revenue & Customs (HMRC) has drafted regulations requiring tax advisors and financial institutions to remind their UK-resident clients about the Common Reporting Standard (CRS), under which HMRC will soon be receiving reports of their financial accounts in the UK and overseas.

The draft regulations, accompanied by 19 pages of guidance, will come into force on 6 April. They take the form of changes to the International Tax Compliance Regulations 2015, under s50 of the Finance (No. 2) Act 2015. Both documents are open to comments until this Friday (12 February).

Essentially, they create an obligation for 'financial institutions' (banks, building societies, insurers, fund managers, wealth managers, as well as professionals that offer tax or financial advice or services) to tell clients that:

  • HMRC will soon be getting data on overseas financial accounts;
  • there are opportunities for clients to voluntarily disclose their overseas tax affairs; and
  • there may be sanctions for clients who do not come forward.

Financial institutions and relevant persons must send out these notifications by 30 April 2017. HMRC has not yet finished work on the text of the notification letter itself, which will have to be sent out under HMRC branding. This must be accompanied by a personal covering letter from the professional advisor or financial institution with certain set wording.

Clients who must be notified are those for whom the practitioner has provided offshore advice or services for a period of up to one year or up to three years ending with 6 April 2016 (depending on the nature of the advice given).

It is not yet clear whether this definition includes trustees or executors. Practitioners may choose to send it to all clients to avoid uncertainty, and a GBP300 penalty.

  • HMRC did not publish the draft on its own website. Instead it forwarded a copy to the Chartered Institute of Taxation (CIOT), asking for comments by 12 February, in order to meet the tight timetable for legislation. The CIOT has since


UK tax authority asks for views on CRS client notification regulations