IEIM402505 - Due Diligence: General Requirements: Introduction

Due Diligence: General Requirements: Introduction

Due diligence requirements apply for ‘new’ accounts [see IEIM403120] and ‘pre-existing’ accounts [see IEIM402640].

For both the automatic exchange of financial account information regimes the Regulations require Financial Institutions to identify and maintain information on the tax residence of Account Holders, irrespective of whether or not they are tax resident in a Reportable Jurisdiction [see IEIM402340]. This is referred to as the ‘wider approach’ [see IEIM400140]. Financial Institutions are required to carry out due diligence procedures on financial accounts that they hold in order to establish if the person holding the account is tax resident in a jurisdiction with which the UK has agreed to automatically exchange information. For automatic exchange with the USA under FATCA the Financial Institution must establish whether the person is tax resident in the USA or, for individuals, is a citizen of the USA irrespective of where they are resident.

If the Account Holder [see IEIM402015] is identified as being tax resident in any of the jurisdictions with which the UK has agreed to exchange information on a reciprocal basis then they are a Reportable Person [see IEIM403440] and the account is a Reportable Account [see IEIM401520].

An account is treated as a Reportable Account as of the date it is identified as such pursuant to the due diligence procedures that Financial Institutions must follow. The requirement to apply due diligence procedures for pre-existing accounts is subject to certain options that Financial Institutions may elect to apply such that accounts below de minimis thresholds are not subject to review [see IEIM402565].

  1. IEIM402510
    General Requirements: Notifying Account Holders
  2. IEIM402520
    General Requirements: Reportable Account
  3. IEIM402540
    General Requirements: Reportable Account: Examples
  4. IEIM402560
    General Requirements: Balance or Value of Account
  5. IEIM402565
    General Requirements: Reporting Thresholds
  6. IEIM402570
    General Requirements: Elections and Process
  7. IEIM402580
    General Requirements: Date for Determining the Balance or Value for Thresholds
  8. IEIM402600
    General Requirements: Reliance on Service Providers
  9. IEIM402620
    General Requirements: Alternative Procedures for Pre-Existing Accounts