IEIM402570 | Due Diligence: General Requirements: Elections and Process

Due Diligence: General Requirements: Elections and Process

The exemptions may be applied by the Financial Institution making an election. The effect of the election is that the Financial Institution is not required to review any of its accounts within the de minimis threshold(s) or, where the election instead provides, a clearly identifiable group of such accounts (for example, accounts held by a particular line of business).

The election is made on the electronic return of information to HMRC. A Financial Institution wishing to apply the election will need to register on the HMRC portal [see Automatic Exchange of Information: registering and reporting guidance - Publications - GOV.UK] and complete the appropriate notification of election on the return even if there are no accounts to report. The portal currently has no facility to apply multiple separate elections by business line where different approaches are taken by separate business units within the same legal entity.

Affected entities wishing to make multiple elections should notify their usual HMRC point of contact, for example a Customer Compliance Manager.

If a Financial Institution chooses not to make an election to apply a particular threshold exemption it will need to review all relevant accounts (subject to any other elections made) in order to identify Reportable Accounts.

Except for Depository Accounts with a balance or value of $50000 or less, once a pre-existing individual account is identified as US Reportable Account, then it will be reportable in all subsequent years (irrespective of the previous $1,000,000 review threshold) unless the Account Holder ceases to be a Specified US Person.