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HMRC internal manual

International Exchange of Information Manual

From
HM Revenue & Customs
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Due Diligence: Special Due Diligence Rules: Alternative Procedure for CIVC and Annuities

Due Diligence: Special Due Diligence Rules: Alternative Procedure for CIVC and Annuities

Individual beneficiary of a Cash Value Insurance Contract or an Annuity Contract

A Financial Institution can treat an individual beneficiary (other than the owner) who receives a death benefit under a Cash Value Insurance Contract or an Annuity Contract as a Non-Reportable Person unless the Financial Institution has knowledge or reason to know that the beneficiary is in fact a Reportable Person.  A Financial Institution has reason to know that a beneficiary of a Cash Value Insurance Contract or an Annuity Contract is a Reportable Person if the information collected and associated with the beneficiary contains indicia as described in paragraph B of Section III of the DAC.

Group Cash Value Insurance Contracts or group Annuity Contracts

A Financial Institution can treat an account that is a group Cash Value Insurance Contract or a group Annuity Contract, and that meets the requirements set out below, as a non-Reportable Account until the date on which an amount is payable to an employee/certificate holder or beneficiary (for FATCA, this is subject to a requirement that the Financial Institution obtains a certification from the employer that no employee/certificate holder (Account Holder) is a US Person).

A Financial Institution is not required to review all the account information collected by the employer to determine if an Account Holder’s status is unreliable or incorrect.

The requirements are that:

  • the group Cash Value Insurance Contract or group Annuity Contract is issued to an employer and covers twenty-five or more employees/certificate holders; and
  • the employee/certificate holders are entitled to receive any contract value; and to name beneficiaries for the benefit payable upon the employee holders; and
  • the aggregate amount payable to any employee/certificate holder or beneficiary does not exceed $1,000,000.