IEIM400995 - Non-Reporting Financial Institutions: Qualified Non-Profit Entity

From 1 January 2026, a UK non-profit organisation that is within the definition of Financial Institution and meets certain conditions can be a Qualified Non-Profit Entity, which is a Non-Reporting Financial Institution (NRFI).   

A non-profit organisation that is an Active NFE or Passive NFE cannot be a Qualified Non-Profit Entity.  

The conditions are set out in sub-paragraph D(9)(h) of Section VIII of the CRS, as follows: 

  1. the Entity is established and operated in the UK exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in the UK and it is a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare;  

  1. it is exempt from income tax in the UK; 

  1. it has no shareholders or members who have a proprietary or beneficial interest in its income or assets;   

  1. the applicable laws of the UK or the Entity’s formation documents do not permit any income or assets of the Entity to be distributed to, or applied for the benefit of, a private person or a noncharitable Entity other than pursuant to the conduct of the Entity’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the Entity has purchased; and  

  1. the applicable laws of the UK or the Entity’s formation documents require that, upon the Entity’s liquidation or dissolution, all of its assets be distributed to a Governmental Entity or other Entity that meets the conditions set out in i) to v), or escheat to the government of the UK or any political subdivision thereof. 

In addition to meeting these conditions, the Entity must be: 

•  registered as a charity with the Charity Commission of England and Wales, the Office of the Scottish Charity Regulator or the Charity Commission for Northern Ireland, or 

•  registered with HMRC for charitable tax purposes or as a Community Amateur Sports Club. 

A non-profit organisation that is a Financial Institution and meets the above criteria to become a Non-Reporting Financial Institution from 1 January 2026 may deregister from HMRC’s AEOI service from that date. 

HMRC will accept that any such non-profit organisation that has not registered with HMRC’s AEOI service because it has never had Reportable Accounts is not required to register by 31 December 2025