Client reporting, taxation reporting and investor communications
Reporting questions test what the TA must tell investors and tax authorities, in what format, and by when.
Investor reporting
- Contract notes for every deal showing price, units, charges, trade and settlement dates.
- Periodic statements, often quarterly or half-yearly, plus annual reports and accounts.
- Tax vouchers for distributions and consolidated tax certificates at year end.
- Capital gains information, commonly a realised gains report to help investors complete returns.
Tax transparency reporting
FATCA (US) and CRS (OECD) require the fund and TA to identify reportable accounts, obtain self-certification and report to the local tax authority for exchange with partner jurisdictions. In the UK, FATCA and CRS returns go to HMRC by 31 May following the calendar year end. Entities provide W-8BEN-E or W-9 for US purposes, or a CRS self-certification. Classification matters: a passive NFE must report its controlling persons, while an active NFE may not. CRS also sets due diligence rules distinguishing pre-existing from new accounts, with thresholds for pre-existing individual accounts.
Communications
KIID/KID documents, GDPR privacy notices, notices of general meetings and material change notifications. Complaints must be handled under the firm's complaints procedure and, in the UK, reported to the FCA.
Worked example
A Guernsey-resident individual holds through a BVI company. The company is a passive NFE and the controlling person is Guernsey resident, so the TA treats the account as reportable for CRS and reports the controlling person's details, TIN and account balance to HMRC, which exchanges with Guernsey. FATCA would only bite if a US indicium existed.
Traps
- Assuming CRS and FATCA are the same - scope, forms, thresholds and deadlines differ.
- Reporting the entity when the controlling person is the reportable party.
- Accepting an unsupported or incomplete self-certification.
- Confusing the TA's reporting obligations with giving tax advice to the investor.