UK resident non-domiciliaries (RNDs), who have interests in non-UK structures, are currently not required to provide any information about those structures to HMRC, provided that they claim the remittance basis of taxation in the UK and nothing is remitted to the UK from the structure. This is about to change.

Under new rules, information about non-UK structures with UK resident settlors, beneficiaries and protectors will be provided automatically to HMRC from 2016 even where there is no UK tax payable, nothing is brought to the UK, and all relevant UK persons are compliant with UK tax requirements. RNDs will be able to limit the information passed to HMRC if elections are made – in some cases by spring 2015. But some information must be provided, which will concern many RNDs who, whilst they are tax compliant, are fiercely protective of their personal information for privacy and security reasons.

The changes, although being referred to as ‘UK’ or ‘mini’ FATCA, are not only relevant for Americans. The regime is the UK’s version of FATCA – enabling HMRC to obtain information in relation to UK taxpayers.

Which structures do the changes affect?

For now only structures in the UK Crown Dependencies1 and certain British Overseas Territories2 are impacted. These jurisdictions have entered into agreements with the UK setting out the basis upon which information will be provided. The agreements are not identical and the comments below are a guide only to the position. The application of the rules will be fact-specific, and advice should be sought as necessary.

Obligations are imposed upon trusts within these jurisdictions that are ‘investment entities’ or passive ‘non-financial foreign entities’ (NFFEs). Broadly, if a trust has a corporate trustee or a professionally managed investment portfolio, it will be an investment entity unless under 50% of its income derives from ‘financial assets’ (excluding real property). If the trust is not an investment entity then it will be a NFFE. It will be a passive NFFE if 50% or more of its income is ‘passive income’ (which includes rents). Non-passive NFFEs are ‘active NFFEs’ which do not need to report.

What information must be given?

Where a trust is an investment entity, then information about UK resident settlors, beneficiaries, protectors, trustees, and any other person exercising ultimate control over the trust, must be provided. The information comprises name, address, National Insurance number, the value of the trust (or a share of it depending on the circumstances) at the end of the year, the amount paid, if any, to the relevant UK person and the number of any relevant bank account.

Where a trust is not an investment entity but is a passive NFFE, a relevant financial institution (such as the trustee or investment manager) must provide information on UK resident ‘controlling persons’. These include the settlor, the trustees, beneficiaries with a certain level of entitlement to the trust assets, and in some cases the protector. The information is similar to that detailed above for investment entities.

Alternative reporting regime for remittance basis users

RNDs who use the remittance basis are able to elect into a special regime. This regime requires an opt-in by the financial institution controlling/managing the trust. In addition the RND must make an annual election to the financial institution and self-certify that he is not UK domiciled and is a remittance basis user. In this situation the financial information to be provided is limited, broadly, to information in respect of funds coming from the UK to the trust, passing to the UK from the trust, or coming from or passing to unidentifiable jurisdictions. But the name and address of the trust must also be provided, in most cases.

When do the rules apply from?

Information must be given by early/mid 2016 in respect of 2014, but the elections to be given for the RND regime to apply must be made by mid-2015, for 2014. Disclosure regimes may apply to enable taxpayers to regularise their affairs prior to information exchange taking effect.


We are seeing more enquiries made by HMRC into RNDs generally. Further, HMRC has signed an agreement with 51 countries to implement information sharing about accounts and entities, from 2016. It is not expected there will be any relaxation, for remittance basis users, of the information required. Thus the tentacles of the reporting Hydra spread ever wider and will encompass virtually all jurisdictions.