2017 - The Year When Bank Secrecy Came To An End

Issue 20

Just before Christmas, the OECD announced that the number of relationships in place for the automatic exchange of Bank account information between countries had passed 1300. Of these, 1133 are live so ready to exchange information in 2017.

These exchange-of-information agreements largely stem from the Common Reporting Standard (CRS). The rather bland title perhaps belies its significance in terms of tax secrecy and the fight against tax evasion.

In broad terms, what the CRS does is require financial institutions to tell HMRC about accounts held by persons that are tax resident overseas and then HMRC passes this information to the country where that person is resident. The first submissions by the financial institutions are due to be made to HMRC by the end of May 2017. In return, tax authorities around the world will soon be sharing massive amounts of data with HMRC who will be using it to check the UK tax position is right.

There are still plenty of countries yet to sign up, the biggest absentee being the US. The US brought in its own Foreign Account Tax Compliance Act (FATCA) rules a few years ago. The concept is largely similar to CRS, with financial institutions overseas having to report account information to the US authorities. The main difference between FATCA and CRS is that FATCA was designed to be a one-way street: non-US institutions disclose accounts of US nationals but not necessarily the other way around.

Putting the US to one side, the message is that there is nowhere to hide and it is better to approach HMRC if you feel you have an issue before they approach you. And they will. There is no such thing as a secret Bank account anymore.

Sign-up to our newsletter

  • This field is for validation purposes and should be left unchanged.