The following Private Client guidance note provides comprehensive and up to date legal information covering:
The exchange of information between HMRC and tax authorities in other territories is an essential tool in enabling authorities both to administer and enforce their own taxes, and to tackle avoidance and evasion. The importance of effective exchange of information has increased over the years as international trade barriers have been reduced and capital has become more mobile.
The UK has historically exchanged tax-related information on request or spontaneously, but in recent years there has been a shift towards the automatic exchange of information. The US Foreign Account Tax Compliance Act (FATCA) provided a catalyst by requiring the automatic exchange of information regarding US citizens between foreign (ie non-US) financial institutions and the tax authorities of the US. The US and the G5 countries (the UK, France, Germany, Italy and Spain) developed model Inter-Governmental Agreements (IGAs) to assist countries in complying with the demands of FATCA.
Based on these model IGAs, the OECD developed the global Common Reporting Standard (CRS) for automatic exchange of information.
In parallel with the bilateral IGAs being put in place, the G20 leaders have repeatedly called on all countries to sign up to the OECD's Multilateral Convention, which is a multilateral information exchange instrument providing the legal basis for all possible forms of administrative cooperation between states, including the automatic exchange of information. See Practice Note: The OECD Multilateral
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