The Automatic Exchange of Information Programme was set up by the HMRC to help counteract the growing problem of tax evasion across borders. The fundamental idea behind the programme is that the UK and other countries will be able to exchange information about certain UK registered tax payers using the Common Reporting Standard, thus providing tax authorities in other nations who they may have links to with a wider range of financial information.

Within our Personal Tax team at Shaw Gibbs, we have most recently assisted a number of US nationals living in the UK. The key act of importance for US nationals is the United States Foreign Account Tax Compliance Act (FATCA) – an agreement between the two nations that means UK banks and institutions must report their UK resident US National customers to HMRC.

You may wonder where exactly the HMRC is collecting this information from. Well the first port of call is financial institutions, but other reporting entities such as charities and trusts (non-financial entities) with qualifying investments and or controlling individuals/reportable persons (US Nationals for instance) may also be required to file reports. Such information will be collected and provided to the foreign nation’s revenue service on a calendar year basis.

As for who is applicable, the FATCA reporting start date applies to all accounts and investments in existence at 30/06/2014, and all of these relevant accounts are to be reported to HMRC annually by 31/5 following and exchanged with the IRS by 30/9 following. The first reporting calendar year is 2016, so the information will be received by the IRS for the first time in 2017.

The word ‘information’ could be considered a vague term, so to clarify, the information being reported on will include the following:

• Name/address/residence/tax number
• Date of birth & place of birth
• Account numbers
• Account balance or investment value
• Gross interest
• Dividends
• Sales proceeds of investments
• Name of reporting entity

For those concerned about the use of their data, the Automatic Exchange of Information Programme includes terms that ensure the data is securely held and exchanged, is completely confidential and is only used to offset the problem of tax evasion.

Please do pass on my e-mail address david.rickwood@shawgibbs.com if you know of any US Nationals resident in the UK who may have any queries regarding HMRC’s Automatic Exchange of Information and in particular its impact on US Nationals who may not realise that they are not fully compliant with all relevant IRS and FinCen filings.