Aaron Brinkley ATT TEP
- Trust & Estates Tax Assistant Manager
- +44 (0)330 124 1399
- Email Aaron[email protected]
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These returns are recorded on a calendar year basis and therefore these returns report trust and beneficiary information for the year ended 31 December 2022.
In terms of the information reportable on the Return, the AEOI Return records the reportable beneficiary’s name, date of birth, address details, value of their share in the fund and the value of any payments received during the year.
If you think that you have a Trust which may meet the reportable conditions, it is important not to miss the deadline.
The Automatic Exchange of Information (AEOI) regulations are comprised of two regimes, being The United States Foreign Account Tax Compliance Act (FATCA) and The Common Reporting Standard (CRS).
These regimes were introduced so that different jurisdictions could share information regarding entities operating in more than one country. This helps to improve transparency against tax evasion and protects the integrity of the tax systems of the participating jurisdictions.
Regarding Trusts, an AEOI return is required to be submitted for Financial Institutions (FI) with a reportable person. A Financial Institution for these purposes is a Trust with more than 50% of it’s income arising from ‘money market instruments, portfolio management or the investment and administration of funds’. This refers to Trusts with a listed portfolio of investments of which more than 50% of their arising income in any financial year is generated from these investments.
Trusts which do not meet the above definition are Non-Financial Foreign Entities (NFFE) and are not reportable under AEOI. These types of Trust will have more than 50% of their total income deriving from rental income or other income, for example dividends from private company shares and less than 50% of their income is derived from portfolio investments.
A reportable person for FATCA purposes is a US based beneficiary of a Trust which is defined as an FI as above. The beneficiary is reportable if they are resident in the United States of America, this applies to a life interest beneficiary of a Trust of a discretionary beneficiary of a Trust who has received a payment during the year.
A reportable person for CRS purposes applies to beneficiaries based in all other countries worldwide which have signed up to the Common Reporting Standard treaty. The treaty has been expanded since it’s inception in 2017 and over 100 jurisdictions now exchange information on financial accounts. This again applies to a life interest beneficiary of a Trust of a discretionary beneficiary of a Trust who has received a payment during the year.
To check if you have a Trust which meets the reportable conditions under either FATCA or CRS, please do contact us and a member of our trust team and we will be happy to assist you.
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