Bermudan financial institutions using the Alternative Reporting Regime (ARR) must report directly to the UK.
Differences in approach from Automatic Exchange of Information (AEOI)
Reporting is on a tax year basis for the periods ending 5 April 2015 and 5 April 2016 compared with the calendar year reporting for AEOI.
Transition to the Common Reporting Standard (CRS)
The Crown Dependencies and Overseas Territories (CDOTs) Inter-Government Agreements will be replaced by the CRS from 2018 onwards. 2017 is a transition year. The ARR is only available for reporting for the tax years ending 5 April 2015 and 5 April 2016.
The ARR only applies to the CDOTs jurisdictions reporting to the UK. It enables a financial institution to elect to the competent authority in its jurisdiction to restrict reports of accounts that:
- are identified as held by Specified UK Persons who are individuals, and who have non-domiciled status for UK tax purposes
- have elected for the remittance basis to apply
In the case of Bermuda this information will be reported directly to the UK by the Bermudan financial institutions rather than via the competent authority.
Where an ARR election has been made, any Specified UK Person wishing to take advantage of the ARR must provide the Bermudan financial institution with the information required by Annex III (C) of the UK-Bermuda Inter-Governmental Agreement by 28 February following the end of the relevant tax year (the preceding 5 April).
Information to be provided
Where the conditions for the ARR are met Bermudan financial institutions need to report for all Specified UK Persons (who are individuals), name, address, date of birth, and the gross payments:
- and movements of assets from an originating UK source into the UK reportable account
- and movements of assets from an originating source territory or jurisdiction that cannot be determined, into the UK reportable account during the relevant tax year
- from the UK reportable account to an ultimate UK destination, during the relevant tax year
- from the UK reportable account to an ultimate territory or jurisdiction that cannot be determined, during the relevant tax year
Bermudan financial institutions will need to register with HM Revenue and Customs by email to email@example.com to report under the ARR and then submit reports via email using the ARR reporting template. Reports for the tax year ending 5 April 2015 must be made by 30 September 2016 and for the tax year ending 5 April 2016 by 30 September 2017.