The Common Reporting Standard – Issues that have cropped up for Trustees and Private Clients

Countries are required by the CRS to cause banks to collect and return information from reporting financial institutions, which is then exchanged with other jurisdictions.  The rules can be seen as invading the individual’s right to respect for private life.  In one case, a Portuguese resident was the founder and beneficiary of an Austrian private foundation.  The foundation was a passive NFE, and the “controlling persons” were the founder and board members.  In the second case, an Austrian resident took out a life insurance policy with the Austrian branch of a Luxembourg insurance company and no reporting was required.  In the third case, an Austrian individual was a non-discretional beneficiary of a Jersey trust.  The beneficiary and the protector were reportable.  In the fourth case, an Austrian resident set up a Liechtenstein foundation, which was transparent for Austrian tax.  The foundation had to treat the founder’s interest as a reportable account.