Charities: Due diligence: Pre-existing accounts
IEIM404840: Charities: Due diligence: Pre-existing accounts
It is anticipated that most of a charity’s Financial Accounts will be ‘new’ accounts for the purposes of due diligence; this section of the guidance will only apply where a charity has debt or equity interests in existence immediately before the dates the agreements came into effect (CDOT 30 June 2014, CRS 31 December 2015). This is most likely to be where a charitable company has debt or equity interest holders, or where a trust, foundation or similar arrangement has existing grants with ongoing instalments at the relevant dates; and/or where an equity interest is held by a settlor of the trust or foundation.
The pre-existing account due diligence requirements rely on a review of the existing records that the Financial Institution maintains, to see whether there are indicia that the individual or entity is tax resident in a reportable jurisdiction. It is recognised that charities are not subject to the same regulatory requirements as most other Financial Institutions, and so may not have all of the records referred to in the due diligence procedures. In carrying out indicia searches the charity should review the records that it has maintained; it is not required to contact account holders again to seek additional information, unless it chooses to cure indicia where there are conflicting indicia or indicia is believed to be incorrect [see IEIM402880].