3.—(1) A reporting financial institution must establish and maintain arrangements that are designed to identify reportable accounts.
(2) Such arrangements must—
(a)identify the territory in which an account holder or a controlling person is resident for income tax or corporation tax purposes or for the purposes of any tax imposed by the law of that territory that is of a similar character to either of those taxes,
(b)apply the due diligence procedures set out in the relevant agreement,
(c)secure that the information obtained in accordance with this regulation, or a record of the steps taken to comply with this regulation, in relation to any financial account is kept for a period of six years beginning with the end of the year in which the arrangements applied to the financial accounts.
(3) The due diligence procedures are—
(a)in relation to a reporting financial institution under the DAC, set out in Annexes I and II to the DAC,
(b)in relation a reporting financial institution under to the CRS, set out in Sections 2 to 7 of the CRS,
(c)in relation to a reporting financial institution under the FATCA agreement, set out in Annex I to that agreement.
(4) A reporting financial institution under the CRS must also apply the rules in Annex II of the DAC treating references to “Member State” in that Annex as references to “Participating Jurisdiction”.
(5) In applying the due diligence procedures, accounts within regulation 2(1)(b) and (c) in respect of which no election under regulation 2(2)(c) has been made are treated as new accounts or pre-existing accounts as the case may be.
4. A reporting financial institution under the DAC and the CRS may—
(a)apply the due diligence procedures for new accounts to pre-existing accounts, and
(b)apply the due diligence procedures for high value accounts to low value accounts.
5.—(1) A reporting financial institution under the FATCA agreement may modify the due diligence requirements as follows.
(2) In the case of an account within paragraph II.B or II.C of Annex I to the FATCA agreement, the due diligence requirements do not include the requirement to carry out the electronic search described in paragraph II.B (1) of that Annex if—
(a)the institution has established that the account holder is a specified U.S. person from documentary evidence mentioned in paragraph VI.D of Annex I of the agreement, and
(b)it has done so in order to meet its obligations under a Qualifying Intermediary agreement as mentioned in that paragraph.
(3) In the case of an account with paragraph II.D or II.E of Annex I to the FATCA agreement, the due diligence requirements do not include the requirement to carry out the electronic searches described in paragraph II.B (1) or II.D (1) of that Annex or the requirement to carry out the paper record search described in paragraph II.D (2) of that Annex if—
(a)the institution has established the account holder is a specified U.S. person from documentary evidence mentioned in paragraph VI.D of that Annex, and
(b)it has done so in order to meet its obligations under a Qualifying Intermediary agreement as mentioned in that paragraph.
(4) The reporting financial institution may rely on evidence that a person is a specified U.S. person obtained in relation to another financial account if the due diligence procedures in the relevant U.S. Treasury Regulations would allow such reliance.
(5) For the purposes of this regulation references to the documentary evidence set out in paragraph VI.D of Annex I of the FATCA agreement are to be treated as if the words “other than a Form W-8 or W-9” were omitted.
6.—(1) A reporting financial institution must, in respect of the first reporting year and every following calendar year, make a return setting out the information required to be reported under the relevant agreement in relation to every reportable account that is maintained by the institution at any time during the calendar year in question.
(2) The first reporting year is—
(a)the calendar year 2014 in relation to an account identified as a reportable account for the purposes of the FATCA agreement,
(b)the calendar year 2016 in relation to an account identified as a reportable account for the purposes of the DAC or the CRS.
(3) The information required to be reported is—
(a)in relation to an account identified as a reportable account for the purposes of the DAC, set out in Section I of the Annex I to the DAC,
(b)in relation to an account identified as a reportable account for the purposes of the CRS, set out in Section I of the CRS,
(c)in relation to an account identified as a reportable account for the purposes of the FATCA agreement, set out in Article 2(2) of that agreement.
(4) The return must be submitted electronically in accordance with regulation 7 on or before 31stMay of the year following the calendar year to which the return relates.
(5) For the purposes of the information required to be reported under the relevant agreement—
(a)interest includes any amount that is chargeable as interest under Part 4 of ITTOIA 2005 M1,
(b)references to the balance or value of an account include a nil balance or value, and
(c)references to paying an amount include crediting an amount.
7.—(1) The return must be made electronically using an electronic return system.
(2) The form and manner of an electronic return system is specified in specific or general directions given by the Commissioners for Her Majesty's Revenue and Customs.
(3) A return which is made otherwise than in accordance with paragraphs (1) and (2) is treated as not having been made.
(4) An electronic return system must incorporate an electronic validation process.
(5) Unless the contrary is proved—
(a)the use of an electronic return system is presumed to have resulted in the making of the return only if this has been successfully recorded as such by the relevant electronic validation process,
(b)the time of making the return is presumed to be the time recorded as such by the relevant electronic validation process, and
(c)the person delivering the return is presumed to be the person identified as such by any relevant feature of the electronic return system.
(6) A return made behalf of a reporting financial institution is taken to have been made by that institution, unless the institution proves that the return was made without the institution's authority.
8.—(1) In relation to an account identified as a reportable account for the purposes of the FATCA agreement, the information required to be reported is modified as follows.
(2) In the case of all reportable accounts for the calendar year 2014, the information required to be reported is provided in Article 3(3)(a)(1) of the FATCA agreement.
(3) In the case of custodial accounts for the calendar year 2015, the information required to be reported is provided in Article 3(3)(a)(2) of the FATCA agreement.
(4) In the case of pre-existing accounts—
(a)for calendar years before 2017—
(i)there is no requirement to include a U.S. federal taxpayer identifying number if the reporting financial institution does not hold that number, but
(ii)if the account holder is an individual whose date of birth the institution does hold, the institution must include the account holder's date of birth instead, and
(b)for the calendar year 2017 and subsequent years, if a reporting financial institution does not hold a U.S. federal taxpayer identifying number that it is required to report, the institution must obtain that number from the account holder.
9.—(1) In relation to a reporting financial institution under the FATCA agreement, the due diligence requirements and the information required to be reported are modified as follows in relation to payments to a non-participating financial institution.
(2) A reporting financial institution must establish and maintain arrangements that are designed to identify payments made by the institution to a non-participating financial institution in the calendar year 2015 or 2016,
(3) “Payment” here does not include consideration given by the reporting financial institution for the provision of goods or services to it.
(4) A reporting financial institution must apply the due diligence procedures set out in paragraph IV.D (3) of Annex I of the FATCA agreement to identify whether a financial institution is a non-participating financial institution.
(5) In respect of any case in the calendar years 2015 and 2016 when a reporting financial institution is within the terms of sub-paragraph 1(e) of Article 4 of the FATCA agreement, the institution must make a disclosure of information in accordance with the requirements of that sub-paragraph.
(6) A reporting financial institution must in respect of each of the calendar years 2015 and 2016 prepare a return setting out the information set out in Article 4(1)(b) of the FATCA agreement.
(7) The return must be submitted electronically in accordance with regulation 7 on or before 31stMay of the year following the calendar year to which the return relates.
(8) For the purposes of this regulation, “non-participating financial institution” includes anyone who is treated as a non-participating financial institution as a result of sub-paragraph 5(a) of Article 4 of the FATCA agreement.
10.—(1) A reporting financial institution must notify each individual reportable person or individual specified U.S. person that information relating to that person which is required to be reported under regulation 6 will be reported to HMRC and may be transferred to the government of another territory in accordance with a relevant agreement.
(2) The notification must be made by 31st January in the calendar year following the first year in which the account held by the individual is a reportable account maintained by the reporting financial institution.
11.—(1) If a reporting financial institution is not resident in the United Kingdom, the obligations of the institution under these Regulations are to be treated as if they were also the obligations of any UK representative of the institution.
(2) “UK representative” has the same meaning as it has in—
(a)Chapter 6 of Part 22 of CTA 2010, in relation to a reporting financial institution that is within the charge to corporation tax, and
(b)Chapter 2C of Part 14 of ITA 2007, in relation to any other reporting financial institution.
(3) For the purposes of this regulation—
(a)a reporting financial institution which is a partnership is resident in the United Kingdom if the control and management of the business of the partnership as a reporting financial institution takes place there, and
(b)a reporting financial institution which is not a partnership is resident in the United Kingdom if it is resident in the United Kingdom for corporation tax or income tax purposes.
12. A reporting financial institution may use a service provider to undertake the due diligence requirements under regulations 3 to 5 and the reporting obligations under regulations 6 and 9, but in such cases those obligations continue to be the obligations of the institution.