The Common Reporting Standard (CRS) was introduced by the OECD to facilitate the automatic exchange of information between co-signatory jurisdictions.

Over 100 countries have already signed up to implement the standard, with the aim of sharing information by September 2018.  Several jurisdictions (for example, Panama, the Cayman Islands, the BVI and the Isle of Man) have designated themselves as “early adopters” and have already exchanged information in September 2017.

The CRS will force Financial Institutions to identify the residency of the “controlling person” and to report information on these individuals to their country of residence.  A controlling person is defined as the natural person who has control over the account, which can include the following:

  • The named account holder,
  • Any 25% (or more) natural shareholder in a corporate entity,
  • The settlor of a trust, or
  • A trustee, protector or beneficiary of a trust.

The information that will be shared may be:

  • The name, address, date of birth and tax identification number of the account holder,
  • The account number,
  • The account balance,
  • Any income generated by the account,
  • The gross proceeds of any sale of assets, and/or
  • Any other notable payments received or made.

What are the potential issues?

  • Information will be reported to the jurisdiction that the bank has listed as the residence of the controlling person – this may not be your current resident country for tax purposes.
  • There is likely to be multiple reporting of the same information.
  • The information may be different to that disclosed to the tax authorities by the individual.
  • The asset balances will be reported, giving authorities more information than they may currently be able to obtain.
  • There are clear data protection issues due to information being passed around the world.

International families need to understand how these rules will affect them.  Tax authorities will receive significantly more information than previously and complex structures, previously unreported, could be thrust into the limelight.

With the current “Requirement To Correct” and the “Failure To Correct” provisions coming in as of 1 October 2018, it is more important than ever to ensure that your tax affairs are in order.

Failure to do so could result in penalties of up to 300% of the potential lost revenue (minimum 100%), a potential 10% asset-based penalty and potential “naming and shaming”, whereby your name, address and details of tax underpaid are published by HMRC.  This list can be searched for accessed by anyone online, giving significant scope for reputational damage.

If you have any concerns regarding an account or overseas asset/structure which may be reported to HMRC, we would strongly advise that you speak to a specialist today.  There are multiple options for making voluntary disclosures to HMRC which will help mitigate penalties, reduce the likelihood of prosecution and help protect your reputation.


At Lancaster Knox, our Tax Investigation specialists are industry recognised and have made hundreds of tax disclosures to the UK authorities over the years.  We regularly undertake tax risk reviews for clients, whereby we look at their worldwide affairs and advise on how HMRC are likely to view certain arrangements.

If a tax disclosure is required, we are adept at managing interactions with HMRC to ensure that the process runs smoothly and that the client’s interests are best protected.

We also appreciate that, often, this is the first tax disclosure that the client has ever made and voluntarily approaching HMRC can be a nerve-wracking experience.

Lancaster Knox will work with you, and your current adviser where relevant, to ensure that HMRC do not seek to obtain information they are not entitled to, that the process is as unobtrusive as possible and give you peace of mind that any historical tax inaccuracies are resolved as soon as possible.