New Automatic Exchange of Tax information requirement – Upcoming deadline


Background
 
UK Financial Institutions with FATCA or Common Reporting Standard (‘CRS’) reporting obligations have been required to register and file annual returns to HMRC under the International Tax Compliance Regulations since 2015, with details of (non-UK) reportable account holders who are tax resident in the US or in CRS reportable jurisdictions.
 
However, as HMRC do not require nil returns to be filed each year, there are a number of entities that meet the definition of a UK ‘Financial Institution’ but generally have no annual compliance obligations if there are no reportable accounts to report.  
 
Updates
 
On 16 July 2025 the International Tax Compliance (Amendment) Regulations 2025 came into force amending the existing International Tax Compliance Regulations.
 
These amendments are designed to align UK law with the latest updates from the OECD regarding the Common Reporting Standard (CRS) and to improve international cooperation against tax evasion and fraud and be more consistent with the compliance obligations imposed by other global tax authorities.

One of the new requirements is that all UK trusts that meet the definition of a ‘Financial Institution’ for purposes of the UK’s Automatic Exchange of Tax Information (AEOI) regime will need to register with HMRC by 31 December 2025. This includes Trustee Documented Trusts where reporting has previously been completed by the Trustee.
 
This will give HMRC visibility over the population of UK financial institutions, all of which have FATCA/CRS due diligence obligations, i.e. reviewing account holders to determine any reportable accounts.
 
The amendments also include an increase in the financial penalties for non-compliance, for example:
 
  • A late registration penalty of up to £1,000
  • The late filing penalty has increased from £300 to a maximum of £5,000.
  • Penalties for inaccurate data will be charged on a per account holder basis rather than per error.
  • A £300 penalty for failure by a person (customer) to provide a valid self-certification if requested by a Financial Institution
 
Actions
Financial Services businesses and investment structures will need to be reviewed to determine any in-scope entities which meet the definition of a ‘Financial Institution’ but previously had no FATCA/CRS reporting obligations.
 
All entities will need to complete a one-time registration process with HMRC by 31 December 2025 via their HMRC Online Services account. If the Trust already has a government gateway account, for example for reporting under the Trust Registration Service, the same gateway account can be used to complete this registration.
 
HMRC have confirmed that they will maintain the current approach and not require nil returns. Therefore, the one-time registration should be the main compliance requirement for any impacted entities or Trusts.

All registrations must be completed by the Trustees, we are happy to help trustees in classifying the Trust and assisting with the registration process. The following is a link to the HMRC guidance and registration page:
 
Register for Automatic Exchange of Information - GOV.UK
 
We understand that these registrations are usually already in place, however it is worthwhile checking the position for your Trust or entity. We are happy to have a call to chat through, whilst most of the team are breaking for the holidays on 23rd, please contact our tax partner, Lorraine Nelson, if you would like to chat through.