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HMRC internal manual

International Exchange of Information Manual

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HM Revenue & Customs
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Notification requirement: Specified Relevant Persons

Relevant persons are any businesses who give financial or legal advice or services in the course of business.  The notification need only be sent by a Specified Relevant Person, which is one who gives offshore advice or services [IEIM603000+] and does not meet any of the exemptions.

Specified Relevant Persons need to identify ‘specified clients’ to notify under either the specific approach (which targets specific clients), or the general approach (which looks at a group of clients).  Specified clients in both cases will be tax resident in the UK in either or both of the tax years 2015-16 or 2016-17, and will be current clients at 30 September 2016.

The Specified Relevant Person need only perform the due diligence under one of the options.  If, on performing the due diligence, they find that they have no ‘specified clients’ to notify, they need not then move on to the other approach; they will simply send no notifications.

Specific approach

Reg.12D(3) and (4)

Under this approach the Specified Relevant Persons should identify and notify clients to whom they have provided offshore advice or services [IEIM603030].  It is not necessary for the Specified Relevant Person to send a notification where they have completed and submitted a personal tax return for the client which reflects the offshore advice or services.

The tax return must reflect the advice or services in such a way that a reasonable person could see that it has been provided.  If they have provided the client with offshore advice or services but the return shows no income or assets overseas, for example, this unlikely to be reflective of that underlying advice.

Under the specific approach, a Specified Relevant Person must also send a notification to any of their clients whom they have referred to a connected person outside of the UK for the provision of offshore advice or services –even if they have not provided such services to the client themselves.  Again, the exemption applies where they have completed and submitted a personal tax return for the client which reflects the offshore advice or services provided by the connected party.

General approach

Reg.12D(5) and (6)

We recognise that for the majority of Specified Relevant Persons it will be difficult to identify to which of their clients they have provided offshore advice or services; hence the Regulations provide an option for a general approach.

Under the general approach the Specified Relevant Person must identify and notify all of their clients to whom they have provided any advice or services about their personal tax affairs in the year to 30 September 2016.

The Specified Relevant Person may choose to exempt clients for whom they completed and submitted a personal tax return covering the period of the advice.  The Specified Relevant Person knows that the client has tax affairs that need to be reflected to HMRC, but also knows that HMRC have received a return for that period that was completed with that advice in mind.

The clients under the general approach will have received advice or services in respect of their personal tax affairs.  Businesses who mainly, or partly, provide non-tax advice and services can therefore choose to exempt clients, groups of clients, or divisions of the business where they reasonably believe that they will not have provided clients with any advice or services about their personal tax affairs in the year to 30 September 2016. Where, however, a part of the business does offer this kind of advice or services, the due diligence should be performed to find specified clients for notification under this approach.