On 13 March 2014, HM Revenue & Customs (HMRC) published the International Tax Compliance (Crown Dependencies and Gibraltar) Regulations 2014, outlining the obligations of reporting financial institutions in relation to the UK agreements with the Isle of Man, Jersey, Guernsey and Gibraltar. These regulations cover the definition of reporting financial institutions, reportable accounts, identification and reporting obligations, as well as penalties that may be applicable and which came into force on 31 March 2014.
HSBC Group Tax is reviewing the Regulations and will provide guidance in due course. It has also reviewed the draft HMRC and Crown Dependencies Tax Authorities' Guidance documents, published in late February, with a view to issuing guidance.
The Crown Dependencies (the Isle of Man, Guernsey and Jersey) and the British Overseas Territories (the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, the Turks and Caicos Islands, Montserrat and Gibraltar) have all agreed to enter into automatic tax information exchange agreements with the UK.
Four of these UKCDs and OTs (the Isle of Man, Guernsey, Jersey and Gibraltar) have signed reciprocal agreements with the UK, meaning that UK financial institutions will have to provide data on financial accounts held by residents of these territories. The remaining territories (the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, the Turks and Caicos Islands and Montserrat) are "non-reciprocal", meaning that UK financial institutions will not have any reporting obligations under the terms of the agreements.
UKCD and OT classification
Classification for New Clients is closely aligned to the Foreign Account Tax Compliance Act (FATCA). The key difference is that for UKCD and OT we capture 'tax residency' as opposed to 'US Persons' for FATCA. Currently in-scope for GBM (x4) are the UK, Bermuda, the Cayman Islands and Guernsey.
HSBC expects that the agreements made under Automatic Exchange of Information (AEOI) by the UK, the Crown Dependencies and the Overseas Territories will be replaced by the OECD'S Common Reporting Standard (CRS) Agreements from 1 January 2016.
For more information on the UK Crown Dependencies and Overseas Territories Legislation, please visit the HMRC website.
Last updated: 3 August 2016