New Global Information Exchange Regimes and the Impact on the Financial Industry Worldwide

If he conceals such income and gains from, for example, the UK tax authorities, then there is a limited prospect of such authorities discovering the account's existence. [...]the idea with information exchange is that Brazilian banks report to their tax authorities details of their foreign account holders, and the Brazilian tax authorities share this information with other tax authorities, including HM Revenue and Customs (HMRC) in the UK, which is thus alerted to Mr Smith's account. Under the 'wider approach', FIs are required to request and retain (usually for six years) information on the residence of all their account holders and the controlling persons of all NFEs. [...]even entities resident in countries in which no exchange of information applies must, for UK FIs to comply with UK law, supply their details to such FIs, even if those FIs do not submit this information in their report to their domestic tax authorities with a view to information sharing. More confusingly, a number ofjurisdictions have left the adoption of the wider approach optional to financial institutions. [...]the financial institutions may require jurisdiction information from all account holders, although they are not required by law to do so. According to the CRS Commentary, beneficiaries who are purely discretionary beneficiaries (ie, have no vested interests in the trust) should only be considered as account holders in relation to a particular reporting period if there has been a distribution to them during that reporting period.