Explanatory note

These Regulations amend the International Tax Compliance Regulations 2015 (S.I. 2015/878) (“the principal Regulations”) which give effect to agreements and arrangements reached between the United Kingdom and other jurisdictions to improve international tax compliance.

Regulation 1(2) provides for the changes to the reporting obligations in regulation 6 of the principal Regulations arising from the update to the common reporting standard for automatic exchange of information (‘CRS’) contained in the OECD (2023) International Standards for Automatic Exchange of Information in Tax Matters: Crypto-Asset Reporting Framework and 2023 Update to the Common Reporting Standard to take effect in relation to the calendar year 2026 onwards.

Regulation 3 amends regulation 1 of the principal Regulations to refer to the 2023 update to the CRS and amend the definition of the FATCA agreement, to provide for the inclusion of certain optional wording in the commentary to the CRS and to make express provision for the publication of lists of reportable and participating jurisdictions by HMRC Commissioners.

Regulation 4 amends regulation 3 of the principal Regulations to extend the deadlines for a financial institution to meet the definition of a qualified credit card issuer and an account to meet the definition of an excluded account.

Regulation 5 inserts regulation 7A into the principal Regulations. This sets out the mechanism for a reporting financial institution to notify HMRC of its election to report the gross proceeds from the sale or redemption of a financial asset under the CRS in addition to the OECD Crypto-Asset Reporting Framework.

Regulation 6 inserts regulation 10A into the principal Regulations. This requires reporting financial institutions and certain non-reporting financial institutions to register with HMRC.

Regulation 7 omits the obsolete client notification obligations in regulations 12A to 12F in the principal Regulations and regulation 8 amends regulation 12G of the principal Regulations to omit references to certain terms used in regulations 12A to 12F and extend its scope to financial institutions, where it currently applies only to reporting financial institutions.

Regulation 9 inserts regulation 12GA into the principal Regulations. This requires an account holder or a controlling person of an entity account holder from whom a reporting financial institution requests a self-certification to provide a self-certification that meets the requirements of the CRS or the FATCA agreement as appropriate.

Regulation 10 extends the scope of regulation 12H of the principal Regulations so that it applies to financial institutions and not merely reporting financial institutions. It also omits unnecessary wording from the definition in paragraph 3.

Regulation 11 omits regulations 13 to 22 of the principal Regulations and regulation 12 inserts regulations 22A to 22N in their place. These make provision for penalties for breach of obligations in these regulations, including a penalty for breach of the new obligation on account holders or controlling persons of account holders to provide a valid self-certification when required to do so by a reporting financial institution and a penalty for failing to register with HMRC.

Regulation 13 amends the anti-avoidance provision in regulation 23 of the principal Regulations by omitting certain obsolete and unnecessary references.

Regulation 14 amends regulation 24 of the principal Regulations by adding a definition of specified non-reporting financial institution and adding, amending and omitting terms within the table of definitions in paragraph 2.

Regulation 15 omits Schedule 3 to the principal Regulations, which is obsolete following the removal of the client notification obligations in regulations 12A to 12F.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.