Tax warning for investors with overseas assets
The new data sharing standard called the automatic exchange of financial account information (AEI) comes into force from January 2017.
Almost 100 countries across the world have signed up to or are in the process of signing up to it. It requires countries to obtain financial information from their financial institutions’ clients and to automatically exchange that information annually with other jurisdictions.
Until now, private financial information wasn’t automatically exchanged between countries and information would need to be requested by one jurisdiction to another if any wrong-doing was suspected.
Andrew Oliver of advisory firm deVere Group said the new standard would not be a problem for “the overwhelming majority of people” who are most likely already compliant, but anyone with undeclared assets could face penalties.
The first AEI will relate to financial information from 1 January 2016.
As such, Oliver said anyone who has overseas assets and investments should “ensure that their tax affairs are in order and compliant sooner rather than later”.
“Failure to do so could mean that they face a nasty shock in the form of penalties from January next year,” he said.
“Ignorance of the new reporting standard will not be a valid excuse in the eyes of the tax authorities.”