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HMRC internal manual

International Exchange of Information Manual

Due Diligence: New Entity Accounts: Reportable Person

Due Diligence: New Entity Accounts: Reportable Person

Where a new entity account is held by one or more entities that are Reportable Persons, then the account must be treated as a Reportable Account.


To determine this, Financial Institutions must obtain a self-certification [see IEIM403340] as part of the account opening procedure and confirm the reasonableness of such self-certification based on the information obtained in connection with the opening of the account, including any documentation collected pursuant to AML/KYC procedures.  In practice, this means the Financial Institution must not know or have reason to know that the self-certification is incorrect or unreliable - if the self-certification fails the reasonableness test, a new valid self-certification must be obtained. Financial Institutions are not, however, expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification. Paragraph 14 of the Commentary on Section VI of the CRS contains examples illustrating the application of the “reasonableness” test.

The self-certification must allow determining the Account Holder’s residence(s) for tax purposes [see IEIM403460].  With respect to new entity accounts, a self-certification is valid only if it complies with the requirements for the validity of self-certifications for pre-existing entity accounts [Link IEIM403340].

There is an exception to the requirement to obtain a self-certification where the Financial Institution can reasonably determine, based on information in its possession or that is publicly available, that the Account Holder is not a Reportable Person. For example where such information shows that the entity is a corporation that is publicly traded, or a Governmental Entity.

If the self-certification indicates that the Account Holder is resident in a Reportable Jurisdiction, the Financial Institution must treat the account as a Reportable Account.  An exception applies where the Financial Institution can reasonably determine, based on information in its possession, or that is publicly available that the Account Holder is not a Reportable Person in respect to that jurisdiction.  For example where the entity is a corporation that is publicly traded, or is a Government Entity.

Timing of self-certification

It is expected that Financial Institutions will maintain account opening processes that facilitate collection of a self-certification at the time of the account opening, whether that process is done face-to-face, online or by telephone.  There may be circumstances where it is not possible to obtain a self-certification on ‘day one’ of the account opening process, for example where an insurance contract has been assigned from one person to another or in the case where an investor acquires shares in an investment trust on the secondary market and this does not come to the attention of the Financial Institution until after the event.

In such circumstances, the self-certification should be obtained as soon as possible and in any case within a period of 90 days after the Financial Institution has knowledge that a new account has come into existence.  This must be in sufficient time for the account to be reported, where the Account Holder is a Reportable Person, for the period in which the Financial Institution identifies the account. Financial Institutions must make proper endeavours to obtain the self-certification in these circumstances. Financial Institutions likely to be affected by this must have processes and procedures in place to ensure that self-certifications are sought from such Account Holders.

Where the Financial Institution is unable to obtain any valid self-certification within 90 days of opening the account, and there are no indicia of residence in any jurisdiction other than the UK, then the account is reportable to the USA under FATCA but is not reportable under the DAC or CRS.  However if there are indicia of residence in reportable jurisdictions other than the UK, then the account is also reportable under the DAC or CRS to those other jurisdictions.