Common Reporting Standard (CRS)

The Common Reporting Standard (CRS) is a global standard for the automatic exchange of Financial Account information between governments around the world to help fight against tax evasion and protect the integrity of systems.

It requires all Financial Institutions including Lloyds Banking Group who operate in CRS Participating Countries to gather certain customer information and report it to local tax authorities.

Lloyds Banking Group together with other Financial Institutions across the world are required to comply with the Common Reporting Standard requirements with respect to due diligence and reporting. Lloyds Banking Group is required to identify customers that are resident in one Participating Country for tax purposes and are holding a Financial Account in another, and accordingly determine the reportable customers for CRS purposes.

Lloyds Banking Group together with other Financial Institutions across the world are required to comply with the Common Reporting Standard requirements with respect to due diligence and reporting. Lloyds Banking Group is required to identify customers that are resident in one Participating Country for tax purposes and are holding a Financial Account in another, and accordingly determine the reportable customers for CRS purposes.

Lloyds Banking Group needs to comply with CRS legislation. We are obliged under CRS to identify customers if we understand them to be tax resident in one Participating Country but with Financial Accounts held in another. Where the customer is tax resident in a Reportable Country, this information is reported to HMRC who may in turn provide it to the tax authority of the Reportable Country.

All banks and their branches in Participating Countries are legally obliged to comply with the Common Reporting Standard.

There may be a number of reasons why we have contacted you, depending on circumstances. We have contacted those customers for whom we hold insufficient tax residency information, or in particular where we have information that indicates they are resident for tax purposes in one Participating Country but with Financial Accounts held in another.

For individual customers with Account(s) In a participating country, this is usually based on:

• tax residence in another Participating Country
• current mailing or residence address which includes a PO Box number, “in care of” or “hold mail”, in another Participating Country
• one or more telephone numbers in another Participating Country (and no telephone number in the UK)
• current effective Power of Attorney or Signatory Authority granted to a person with an address in another Participating Country
• For accounts that are not depository accounts – standing instructions to transfer funds to an account maintained in another Participating Country.

For entities with account(s) in a participating country, this is usually based on:

• a place of incorporation or organisation in a Participating Country
• an address in a Participating Country
• Where the entity is a trust, an address of one or more of the trustees in a Participating Country(ies).

We think that some of the information we hold on you is missing or incomplete. For this reason, we need to ask you to provide additional information or confirmation so we can understand if we need to send your details to the local tax authority in order to comply with CRS regulations.

A customer may be reported to local tax authority if we have information on them which leads us to believe they are tax resident in one Reportable Country but with Financial Accounts held in another. There is a legal requirement for Lloyds Banking Group to do this in order to comply with UK law.

For individuals/controlling persons

• Name, address, date of birth of Financial Account holders
• Place of birth
• Current country(ies) of tax residence
• Tax Identification Number (or equivalent where applicable)
• Account details
• Reporting entity where the account with us is held e.g. Lloyds Bank Plc, Bank of Scotland Plc (including Halifax)
• The total account balance or value of your accounts as of the end of the calendar year or other appropriate period
• Gross amount of interest, gross amount of dividends, and the gross amount of other income or the proceeds from the sale or redemption of investments paid or credited to the account.

For entities

• Name and address
• Current country of tax residence
• Tax Identification Number (or equivalent where applicable)
• Account details
• Reporting entity where the account with us is held e.g. Lloyds Bank Plc, Bank of Scotland Plc (including Halifax)
• The account balance or value as of the end of the calendar year or other appropriate period
• Gross amount of interest, gross amount of dividends, and the gross amount of other income or the proceeds from the sale or redemption of investments paid or credited to the account
• For some entities the information on the controlling person (please refer to above individual section).

CRS applies to certain accounts with investment features such as savings, current accounts, cash value life insurance and certain other investments. However, CRS regulations allow for certain exceptions such as lending products and loans.

CRS reporting is carried out on a yearly basis after the end of a given calendar year. If your account(s) have been deemed to be reportable they will still be reported even if they are closed during that calendar year, but will not be included in the reporting for subsequent calendar years. For example, reportable accounts that were open for all or part of 2017 will be reported to the local tax authority in 2018.

We may be required to report the information we hold about your account to the local tax authority who will share it with the relevant local tax authority.

We are legally obliged to comply with the CRS legislation, which has been introduced and embedded into UK law.

If you do not believe we should be sharing your information with the local tax authority you should contact us and advise us. We will re-issue a Tax Residency Self-Certification form which you should complete and return along with a reasonable explanation and/or any documentary proof requested such as a passport/driving licence as proof of residency for tax purposes.

It may be that you will receive more than one letter. As it is a Lloyds Banking Group policy to talk to our customers under each brand they hold with us you may receive letters from different Lloyds Banking Group brands. For example: if you hold accounts with Bank of Scotland and Halifax you will receive a request to complete a Tax Residency Self-Certification form from each brand. You may also receive requests from other financial institutions if you have accounts with them. You should complete every request.

Following the United States of America (US) Foreign Account Tax Compliance Act (FATCA) legislation and the Crown Dependenciesand Overseas Territories (CDOTs) legislation, the UK has committed to the Common Reporting Standard (CRS) and the Automatic Exchange of Information with other Participating Countries throughout the world. The CRS agreements are separate to the FATCA/CDOT agreements; you will need to provide additional information for the CRS as these regulations have different requirements.

No. We are required by law to share this data with relevant tax authorities. Under the terms of the Data Protection Notice (DPN) contained in your product terms and conditions we are not required to obtain consent in such circumstances.

Full details of our privacy policy can be found in your terms and conditions.

We may be required to contact you in future if the information we hold on record for you changes in such a way that could affect your tax residency.

If your circumstances change, you will need to let us know what these changes are within 30 days from the date of the change.This could include for example, a change of tax residence or change of address that could affect your tax residence.

If you are unhappy that we have asked you to complete the tax residency self-certification form which we have sent you asking you to provide your country(ies) of tax residence & TIN to allow us to confirm where you are tax resident as we are obliged to do under the Common Reporting Standard legislation, please refer to our complaint process.

You can find some useful guidance on where you might be tax resident on the OECD website. However if you are still unsure please seek independent tax advice.

A Taxpayer Identification Number is a unique identifier assigned to individuals and entities for tax purposes. It could consist of a combination of letters, numbers or both. You can find further information on TIN formats for your country of tax residence via the OECD website. If you are a Tax Resident in the UK, the TIN will be your National Insurance (NI) Number or Unique Tax Reference (UTR) Number.

We need a response from you within 90 days of the letter being issued, however, if this date has passed, we still request that you endeavour to return the Tax Residency Self-Certification form as soon as possible.

If you have received a request to complete a Tax Residency Self-Certification form, simply complete, date and return the form using the prepaid envelope provided. You can photocopy the form, but please return documents dated with an original signature.

In the majority of cases the completed Tax Residency Self-Certification form is all that you need to send back. However, certain individual account holders may need to provide certified copies of additional documents and reasonable explanations. If this is required it will be clearly shown in the enclosed letter. This could include: a currently valid passport, National Identity Card, Armed ForcesIdentity Card, current driving licence or Certificate of Tax Residence.

A ‘Reportable Person’ is any individual identified by a reporting entity (such as Lloyds Bank Plc) in one country as being resident for tax purposes in another reportable country (e.g. a jurisdiction with which the participating party has signed an AEoI agreement) and hold a Financial Account.

As well as personal account holders, certain entities resident in a Participating Country or those which have individual Controlling Persons who are resident for tax purposes in Participating Countries may be reportable.

For tax purposes a ‘jurisdiction’ is defined as an area subject to its own distinct tax regulations such as a US state, city, county or country.

This is a country which has made a commitment to exchange information in accordance with the OECD CRS but may not yet have an effective agreement in place with the UK such that reporting is not yet required but is expected to be in due course.

This is a country that has an agreement in place to exchange information in accordance with the OECD CRS.

Each country has its own rules for defining tax residence and countries have provided information on how to determine whether a person or an entity is tax resident in the country. Generally, an individual or an entity is resident for tax purposes in a country, if, under the laws of the country, it should be paying taxes there. When we determine a customer who is holding a Financial Account, is resident for tax purposes in a Participating Country and is reportable for CRS, we will pass the relevant information to the local tax authority.

This reporting of the customer and their information means they are ‘reportable for tax purposes’ to the local authority.

If a customer opens a new account, invests in a new product, or has a change in circumstances which may make them tax resident in a Participating Country, we may write to them asking them to complete a Tax residency Self –Certification form to confirm their place of residence for tax purposes. We may also write to some pre-existing customers who have Financial Accounts with us where this information has not previously been captured. This is called ‘Tax Residency Self-Certification’

Controlling persons are the Natural Persons who have ultimate control over an entity. In the case of a trust, the Controlling Person(s) are the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, or any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership).

For the Common Reporting Standard (CRS) this is defined as a legal person or a legal arrangement such as a corporation, organisation, partnership, trust or foundation. An entity will therefore be any customer that holds a business account, product or service. Under CRS, sole traders are not treated as entities but as individuals.

The term “Financial Account” means an account maintained by a Financial Institution, and includes a Depository Account, a Custodial Account, certain equity or debt interest in investment entities and certain Cash Value Insurance Contract and Annuity Contract issued or maintained by a Financial Institution. A Financial Account is not an excluded account as per the CRS.