Automatic Information Exchange (AEOI) Presentation to STEP MARK SAVAGE 8 September 2015

Page 2 CONTENTS FATCA - Presentation to Praxis Page 2

AEOI Contents Overview / update of acronym heaven! Reporting under FATCA Reporting under the UK IGA The Disclosure Facilities The ARR The CRS Page 3

Page 4 RECAP FATCA - Presentation to Praxis Page 4

FATCA What is it? Foreign Account Tax Compliance Act US Legislation The purpose of FATCA is to counter tax evasion by US taxpayers FATCA creates a withholding regime designed to incentivise banks and other foreign (non-US) financial institutions (FFIs) to sign an “FFI Agreement” An FFI Agreement then commits an FFI to a compliance and reporting regime Page 5

FATCA Inter-Governmental Agreements Model I Agreements (Guernsey, Jersey, IOM, UK plus Cayman, Gib, BVI and others) Take the pain out of FFI Agreements (no need for individual agreements) Resolve local legal issues (confidentiality / data protection etc) Model II Agreements (Bermuda, Switzerland, Japan, Austria etc) Resolve local legal issues (confidentiality / data protection etc) Still require individual FFI agreements No IGA Page 6

Page 7 FATCA REPORTING FATCA - Presentation to Praxis Page 7

FATCA Who are US persons? Basically US taxpayers This means residents and citizens Determined by “indicia”: US Citizen or resident US Place of birth US address US telephone number (but 00 1… includes Canada and others) Power of attorney given to person with US address US “care of” address – if only address available Indicia are “curable” with self-certification Page 8

FATCA Who needs to report? FFIs only Passive NFFEs may need to declare US persons to FFIs (eg banks) 1 st reports (on 2014) due by 30 June nd reports (on 2015) due by 30 June 2016 BUT opportunity to report (in 2016) on 2014 accounts missed off 1 st report (eg because client due diligence not complete) Nil returns required (in Guernsey!) Page 9

FINANCIAL ACCOUNTS What are they? There are five categories 1.Depositary accounts 2.Custodial Accounts 3.Cash Value Insurance Contracts 4.Annuity Contracts 5.Equity and Debt Interests – held in the FFI / NFFE – not by the FFI / NFFE But 1-4 “maintained” by the institution concerned So probably only need to report debt and equity interests Page 10

FINANCIAL ACCOUNTS What is an equity interest in a trust? Beneficiary Settlor Trustee Protector What is the value of the interest? Beneficiary – life tenant = value of their interest - discretionary = value of distribution Settlor- value of their interest / unallocable amounts Trustee etc- usually nil Page 11

FATCA What do we report? Name Address TIN (Taxpayer Identification Number) Account Number (if any) Account balance or value (at year end or when closed) NB By election $50,000 de minimis FATCA - Presentation to Praxis Page 12

Page 13 UK REPORTING FATCA - Presentation to Praxis Page 13

UK IGA Who are UK persons? Basically UK taxpayers This means residents, but not citizens Determined by “indicia”: UK resident UK address (including c/o) Power of attorney given to person with UK address Standing instructions to pay funds to a UK account Indicia are “curable” with self-certification Page 14

UK IGA Who needs to report? FFIs only Passive NFFEs may need to declare UK persons to FFIs (eg banks) 1 st reports (on 2014 and 2015) due by 30 June 2016 Nil returns required (in Guernsey!) Page 15

UK IGA What do we report? Name Address Date of birth & NINO (National Insurance Number) Account Number (if any) Account balance or value (at year end or when closed) NB By election $50,000 de minimis FATCA - Presentation to Praxis Page 16

Page 17 DISCLOSURE FACILITIES FATCA - Presentation to Praxis Page 17

DISCLOSURE FACILITIES An Opportunity to Come Clean The Liechtenstein Disclosure Facility (“LDF”) Why Liechtenstein? Why the LDF? Lower penalties Immunity from prosecution Backstop date – 1999 (v normal 20 years) The Guernsey Disclosure Facility (“GDF”) LDF harder to qualify for HMRC rarely prosecute Slightly less advantageous terms Page 18

DISCLOSURE FACILITIES An Opportunity to Come Clean The Guernsey Disclosure Facility (“GDF”) Raised £2.6 million to 31/3/15 IOM £5.6m raised, Jersey £5.7m – total £13.9m (original estimate £1 billion across all 3 CDs – only £986 million to go) Closing early (as is LDF) on 31 December 2015 New less favourable disclosure facilities to be announced Page 19

Page 20 The ARR ALTERNATIVE REPORTING REGIME FATCA - Presentation to Praxis Page 20

ARR What is it? For UK Resident Non-Domiciliaries (RNDs) Based on UK tax year not reporting (calendar) year Must elect in (FFI (you) and the taxpayer) – now by end December 2015 Taxpayer must self-certify they have filed for remittance basis Only report remittances Page 21

Page 22 The CRS COMMON REPORTING STANDARD FATCA - Presentation to Praxis Page 22

CRS What is it? Multilateral Information Exchange – FATCA for all! Don’t have full details yet – but soon! OECD Common Reporting Standard From 2017 Early adopters from 2016 Guernsey is an early adopter Does not replace FATCA but will replace UK IGA No ARR No de minimis (accounts <$50k) No indicia -Taxpayer Identification Numbers? -Certification of residence? Page 23

Page 24 QUESTIONS? FATCA - Presentation to Praxis Page 24

BIOGRAPHY Page 25 MARK SAVAGE Tax Director Direct: Mobile: BDO LIMITED PO Box 180, Place du Pré Rue du Pré, St Peter Port Guernsey GY1 3LL Tel: Fax: