United Kingdom: HMRC updates AEOI rules and expands CRS scope

HM Revenue and Customs (HMRC) issued a policy paper detailing upcoming regulatory changes to enhance the automatic exchange of information (AEOI) framework in the UK. The regulations align with updates to the OECD’s Common Reporting Standard (CRS) and aim to strengthen tax transparency and compliance.

Key measures in the updated AEOI regulations:

1. Expanded CRS scope:

   • The new rules extend CRS coverage to include:

     • Electronic money institutions

     • Certain e-money products

   • Most charities will be excluded from CRS reporting obligations.

   • Additional data fields will be required in CRS reporting to enhance data usability.

2. CRS amendments implementation:

   • The UK will adopt specific technical changes to the CRS, reflecting updates issued by the OECD.

3. Mandatory registration requirements:

   • All reporting financial institutions and trustee-documented trusts must register with HMRC.

   • Registration will be compulsory 21 days after the regulations are formally published.

4. Self-certification obligations:

   • Account holders and controlling persons must submit valid self-certifications to financial institutions.

   • Financial institutions will be required to obtain and validate these certifications.

5. Revised penalty framework:

   • An enhanced penalty will be introduced for institutions that fail to obtain valid self-certifications.

   • Broader updates to the penalty regime aim to encourage full compliance with the revised rules.

Effective dates:

• CRS updates: Come into effect on January 1, 2026.

• Registration and penalties: Take effect 21 days from the date the final regulations are provided.

These changes reflect the UK’s continued alignment with international tax transparency standards and its efforts to close data gaps in financial reporting.

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