IEIM401740 | Financial Accounts: Excluded Accounts: Introduction

Financial Accounts: Excluded Accounts: Introduction

Both regimes for automatic exchange of information allow for various categories of account to be excluded from being reportable financial accounts. These are excluded because they have been identified as carrying a low risk of use for tax evasion, generally because of the regulatory regimes under which they function.

For FATCA, the excluded accounts are listed in Annex II of the Intergovernmental Agreement between the UK and the USA.

For the CRS, the list of excluded accounts can be found in the CRS at Section VIII C.17 and details of the conditions for being an excluded product are included in the Commentary. Certain products are specifically excluded for CRS purposes by UK domestic legislation in Schedule 2 of the International Tax Compliance Regulations 2015 (SI878/2015) as amended by The International Tax Compliance (Amendment) Regulations 2015 (SI1839/2015) and the International Tax Compliance (Amendment) Regulations 2020 (SI 438/2020). The agreements for automatic exchange provide for the list of excluded accounts to be updated, either to allow for other low risk products to be added or to remove products that are no longer regarded as low risk.

The latest amendment to Schedule 2 to the regulations made four types of financial account that were previously excluded reportable for CRS purposes with effect from 13 May 2020. The four types of account are:

• Non-registered pension arrangements where the annual contributions are limited to £50,000 and funds contributed cannot be accessed before the age of 55 except in circumstances of serious ill health;

• Premium Bonds issued by UK National Savings and Investments;

• Fixed Interest Savings Certificates issued by UK National Savings and Investments, and

• Index Linked Savings Certificates issued by UK National Savings and Investments.