Guernsey: Common Reporting Standard: Are Firms And Clients Ready?

Last Updated: 1 February 2017
Article by Mark Le Ray

Most Read Contributor in Guernsey, November 2018

As demands for more standardised levels of compliance grow internationally, Mark Le Ray of Saffery Champness Registered Fiduciaries looks at the ways in which firms and their clients are preparing.

A decade ago it would have been difficult to envisage the amount of compliance and reporting now required of the offshore financial services industry, not least the obligation to report clients' financial information to multiple jurisdictions around the world.

Yet the Foreign Account Tax Compliance Act (FATCA) is now embedded in the private client landscape and the even more onerous Common Reporting Standard (CRS) has swallowed up Guernsey, Jersey, the UK, and 51 other jurisdictions as early adopters. These countries will report calendar year 2016 information by 30 June 2017 while a further 47 jurisdictions have committed to the CRS first reporting in 2018.

Each participating jurisdiction has been allowed some latitude as to how the CRS is implemented and each will issue guidance notes specific to that jurisdiction. For example, Switzerland's commitment is only on the basis of bilateral agreements, of which they have relatively few - one being with Europe, while Guernsey and Jersey, although only 21 miles apart, have so far taken very different approaches. This article relates to CRS reporting in Guernsey and the associated guidance notes in place at the time of writing.

Are firms ready?

The procedures followed for US FATCA and its UK equivalent, the information exchange for Crown Dependencies and Overseas Territories (CDOT), have given firms a good foundation on which to implement the CRS. However, while procedures and definitions are similar to FATCA, the CRS contains some key differences and covers many more jurisdictions around the world.

All firms will be familiar with "self-certification" forms as part of FATCA which should have been issued to pre-existing clients, to collate FATCA-relevant data where there are US or UK connections.

The wider approach to CRS adopted by Guernsey dictates that firms should collate relevant data on clients in all jurisdictions, rather than just those having touchpoints with early adopter jurisdictions. Firms who were aware of CRS as well as FATCA may have already sent self-certification forms to all clients requesting sufficient data to cover both requirements and so no further work is required, however, failure of firms to submit accurate reports on time could lead to penalties. Furthermore, firms need to consider the risks to themselves and their clients should the client information provided be inaccurate for any reason.

Also, by now new client onboarding procedures should be in place to ensure information relevant to CRS is collated from the beginning of every new client relationship.

It is vital that firms assess reporting requirements now to ensure that entities are classified correctly for CRS. A key difference between the CRS and FATCA is the lack of choice available under CRS relating to investment entities. The Guernsey and USA Intergovernmental Agreement ("IGA") permitted some flexibility in how a financial institution chooses to classify entities but under the CRS in Guernsey there is no such choice.

As an example, the so-called "50 percent gross income test" will dictate whether an entity is an investment entity, reported by the financial institution, or a passive non-financial entity (NFE) which would be reported by a third party to whom the financial institution provides details of the controlling persons.

At the time of writing this is not the case for Jersey, whose guidance notes very helpfully specifically state that FATCA definitions can be used for certain classifications as long as they don't frustrate the purposes of the CRS.

It is important that firms document CRS procedures and ensure that staff are aware of CRS requirements while not forgetting that FATCA reporting will continue for US clients alongside this new global standard. The USA has not committed to the CRS and most commentators believe they will continue on a FATCA-only basis for the foreseeable future. All client entities will therefore have a FATCA classification as well as a CRS classification and it is quite possible they won't be the same.

All firms should document how entities and individuals have been classified for the CRS and maintain an electronically searchable database of relevant information. It should also be noted that the OECD encourages all CRS jurisdictions to perform an audit of procedures; firms should be prepared for their procedures and CRS records to be checked by the local tax authority.

The reporting will be a similar process to that completed for FATCA with the creation of XML files in a specified format which will then be uploaded to Guernsey's online portal, the Information Gateway Online Reporter, more commonly referred to as "IGOR", by 30 June 2017. This is a specialist process which firms are unlikely to be able to undertake themselves therefore incurring the cost and resourcing of systems advice. This information will be collated by the Guernsey Income Tax Authority and forwarded to each relevant participating jurisdiction by 30 September 2017.

The preparation for and implementation of the CRS is a massive task that should not be underestimated. It will have been necessary to critically review policies and processes in place, robustly test them and further review on a regular basis to keep pace with future changes. The systems requirement is just one of the areas that is putting a strain on firms' resources in terms of time, effort and cost.

Protectors & Excluded Settlors

One peculiarity of the CRS for trusts is that protectors, regardless of how wide or limited their powers may be, are reportable as controlling persons. This leads to the quite ludicrous scenario that an individual with no beneficial interest in the trust will have the entire trust balance reported under their name to their jurisdiction of tax residence. A similar issue appears to arise for excluded settlors who, according to a STEP guidance note dated 1 October 2015, will have the full value of trust assets reportable on them for CRS purposes, despite being specifically defined to report a nil balance under FATCA.

Are clients ready?

Each client will likely have a different opinion on the information being reported under the CRS. An observation is that most accept the global push for more transparency with regard to their financial affairs and, having conducted business in such a well-regulated jurisdiction as Guernsey, are already familiar with compliance requirements which ensure their financial information is accurately maintained and reported.

There is a requirement under CRS to inform clients that information relating to them is being provided to the local tax authority for onward transmission to their jurisdiction of tax residence; this must be completed more than 30 days before the report is submitted.

For clients and firms, complying with the CRS will likely be a huge task and there will be concerns over the amount of information being transmitted across multiple jurisdictions. The Guernsey Income Tax Authority has given reassurance that information will be transmitted only to jurisdictions where they have "adequate data safeguards in place to protect the confidentiality of the information provided". A list of those jurisdictions will be published by the authority each year.

In conclusion, the approaching CRS is the most significant outcome of the drive towards increased transparency in a globalised financial services environment. Private client firms will be well advanced in their readiness for the CRS – a scenario for which it could be said it is not possible to over-prepare.

An original version of this article was first published in eprivateclient's 2017 Guernsey report, January 2017.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions