The world has become much more complex since the global economic crisis, with a plethora of new laws and reporting regimes that operate to capture more information about personal wealth and tax residency. As wealth becomes more internationalised and the footprint of families becomes more global, so the incidence of compliance and reporting becomes higher. The consequences for failing to meet new compliance and reporting requirements – for whatever reason – is uncompromising.
There have been mechanisms for governments to access data about individuals in foreign countries for many years through inter-governmental Tax Information Exchange Agreements and Double Tax Treaties. However, these have required a proper footing on which to make such a request and need to satisfy the receiving government that the information being sought is properly required. In the outflow of the global economic crisis, the US government was the first to introduce a regime for automatic reporting of financial information under FATCA. The OECD followed up with the introduction of the Common Reporting Standard, requiring participating countries to automaticly exchange financial information relating to accounts held by foreign tax residents.
More specifically, some countries have introduced or changed laws relating to ownership of assets within their territory (e.g. real estate within the UK) and the disclosure requirements applicable to the vehicles that own such assets.
Ensuring that your wealth asset footprint and your plan for transition of such wealth meets the changing needs of the new compliance and reporting standards is critical to the reputational well being of your family and the value of your wealth.
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