By: Justin Meagher
In October 2013, certain British Crown Dependencies and Overseas Territories (CD/OT), also known as UK FATCA, entered into an intergovernmental agreement (IGA) with the UK to exchange tax information. CD/OT territories include: Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Guernsey, Isle of Man, Jersey, Montserrat, and Turks and Caicos Islands. The IGAs require similar information reporting as FATCA, but the reporting focus is on UK, rather than US, taxpayers.
The Who, What, and When of CD/OT Reporting
In the absence of any exemption or exception, financial Institutions that fall under the UK FATCA jurisdiction must identify any UK tax resident investors (specified United Kingdom persons), and report relevant tax information back to HMRC. The term “financial institutions” applies to a broad range of companies that fall under four categories:
- Depository institutions include banking institutions that accept deposits.
- Custodial institutions include any entities that hold financial assets for the account on behalf of other entities.
- Investment entities include any institution that performs portfolio management, trades in financial instruments, invests in or administers funds, and funds managed by such entities.
- Specified insurance companies include any insurance company that issues or is obligated to make payments to insurance contracts.
The table below provides details on CD/OT reporting specifics, including timelines for reporting, though the time of reporting in a given year varies by each jurisdiction.
|Reporting year||Type of account||Information to be reported||When reported|
|Date of birth|
|UK taxpayer identification number (definition varies according to jurisdiction)|
|Account number or functional equivalent|
|Name and identifying number of reporting financial institution|
|Account balance or value|
|2015||In addition to what is required for reporting year 2014:||2016|
|For custodial accounts||The total gross amount of interest|
|The total gross amount of dividends|
|The total gross amount of other income paid or credited to the account|
|For depository accounts||The total amount of gross interest paid or credited to the account in the calendar year or other reporting period|
|All others||The total gross amount paid or credited to the account including the aggregate amount of any redemption payments made to the account holder during the calendar year or other appropriate reporting period|
|2016||In addition to what is required for reporting year 2015:||2017|
|For custodial accounts||The total gross proceeds from the sale or redemption of property paid or credited to the account|
On April 16, 2016, Her Majesty’s Revenue & Customs (HMRC) announced the CD/OT arrangement will transition to the Common Reporting Standard (CRS) by 2017. However, this may not be inclusive of all CD/OT reporting.
The CD/OT portal technologies and in-house experts from SS&C are available to simplify the compliance process. We also offer related solutions for FATCA and CRS.