IEIM404860 - Charities: Due diligence: New individual accounts

IEIM404860: Charities: Due diligence: New Individual Accounts

New accounts are those opened on or after the CRS switched on for reporting, 1 January 2016; individual accounts are those where the account holder is an individual. For charities that are trusts or foundations, individuals receiving grants will be individual account holders and the due diligence requirements set out will apply to them. New account holders will also include other new debt or equity interests held by individuals.

The due diligence procedures require that a self-certification is obtained from the account holder, that is the recipient of the grant, or holder of the interest. If that self-certification establishes that the individual is resident for tax purposes in a reportable jurisdiction the charity must treat the account as a Reportable Account [see IEIM404780].

Incorrect or unreliable self-certifications

A self-certification remains valid unless the charity knows, or has reason to know, that the original is incorrect or unreliable. This may occur when the charity becomes aware that there has been a change of circumstances, for example when a further grant is made or applied for.. Whatever the cause, where the charity cannot rely on the original self-certification it must obtain either:

  • A valid self-certification [see IEIM404880], or
  • A reasonable explanation supporting the validity of the original self-certification

A charity has reason to know that a self-certification is unreliable or incorrect if there is information in its records that conflicts with the person’s claim regarding their status.

If the charity cannot obtain a confirmation of the validity of the original self-certification or a valid self-certification within 90 days, the charity must treat the Account Holder as resident of the jurisdiction in which the Account Holder claimed to be resident in the original self-certification and also any jurisdiction in which s/he may be resident as a result of a change in circumstances.

Where the charity is unable to obtain any valid self-certification within 90 days of making a grant, and there are no indicia of residence in any jurisdiction other than the UK, then the account is not reportable. However if there are indicia of residence in reportable jurisdictions other than the UK, then the account is reportable to those other jurisdictions.