Trust in CRS? CRS reporting obligations in the context of trusts


Trust in CRS? The Common Reporting Standard reporting obligations in the context of trusts

Executive Summary

The CRS, due to start applying in 2016, will impose reporting obligations and exchange of information standards that will radically change the world of international tax planning. Trusts have been particularly targeted and may be obliged to report information in relation to their beneficiaries, settlors, protectors and trustees. In certain instances this would include the value of settlors’ and beneficiaries’ interests in a trust.

In recent years there has been a global movement towards greater tax transparency between countries with the aim of reducing tax evasion. The automatic exchange of information in relation to tax residents between different jurisdictions has come into being as a direct result. The most recent, and most drastic development on this front is the OECD’s creation of the Standard for Automatic Exchange of Financial Account Information in Tax Matters, generally referred to in its abbreviated form of the Common Reporting Standard (CRS).

Trusts are flagged at the very outset in the introduction to the CRS. Emphasis is laid on the fact that reportable accounts include accounts maintained or held by entities which are trusts. The institutions (often including the trust itself) responsible for reporting on these accounts are also required to look through passive entities to report on individuals that ultimately control these entities. It is clear that there is an agenda in the CRS to ensure that trusts cannot be used by individuals as a shield against reporting requirements.

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Performance magazine issue 17, May 2015

Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.

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