With a plethora of other recent transparency developments – with a focus on the UK’s Register of Overseas Entities and the Trust Registration Service (TRS) – private client practitioners might be forgiven for overlooking the Common Reporting Standard (CRS). Developed by the OECD, the CRS is an international initiative to put in place a common approach to the automatic exchange of tax information on a multilateral basis, which was implemented into UK law in 2015. The CRS builds on the FATCA architecture developed by the US and adopted by the UK. Following announcements at the UK’s Autumn Budget 2024 (which in turn followed a 2024 Government consultation), new regulations were introduced on 24 June 2025 that, with effect from (initially) 16 July 2025, implement changes to the scope of the CRS, in line with international obligations. 

Further regulations were also published on the same date that will implement the OECD’s Crypto Asset Reporting Framework (CARF) into UK law with effect from 1 January 2026 (with reporting to begin in 2027).

We discuss the CRS changes in further detail below and will cover the introduction of the CARF in a separate article in due course.

Amendments to the CRS

At a very high level, the CRS, as currently implemented, requires certain UK “Financial Institutions”¹ to identify non-UK resident “account holders” and, where relevant, their “Controlling Persons”²; keep records; and, make reports to HMRC (who will then automatically exchange the information reported to them with the tax authorities of relevant jurisdictions). The current UK CRS rules are set out (in part) in The International Tax Compliance Regulations 2015 (as amended), which are now (further) amended by The International Tax Compliance (Amendment) Regulations 2025 (the 2025 Regulations), which follow closely those published in draft form at the UK’s Autumn Budget 2024. The main changes introduced by the 2025 Regulations are as follows.

1.    Mandatory registration of all UK Reporting Financial Institutions and Trustee Documented Trusts

The 2025 Regulations introduce the mandatory registration of all UK “Reporting Financial Institutions”³ and “Trustee-Documented Trusts”⁴. For UK Reporting Financial Institutions, this is regardless of whether they actually have something to report (i.e. regardless of whether they have “Reportable Accounts” (broadly, accounts held by “Reportable Persons”, being individuals or entities resident in another jurisdiction with which the UK has implemented an agreement to exchange financial information under the CRS)). This change is designed to give HMRC greater oversight. Previously, only UK Reporting Financial Institutions with Reportable Accounts (and therefore something to report) were required to register.

In the context of UK resident trusts, this means (very broadly) that if a settlor, trustee, protector or certain beneficiary/ies (i.e. an account holder) is resident outside the UK, in a relevant jurisdiction, then the trust will have Reportable Accounts and be registrable under the CRS, provided other relevant criteria are met. For example, the trust qualifies as a UK Financial Institution by virtue of holding financial assets and having a professional trustee which is a Financial Institution in its own right or holding an investment portfolio which is professionally managed. However, previously, where account holders were (solely) UK resident and therefore there was nothing to report to HMRC, there was no need for the trust itself (or its trustee) to register with HMRC. Now, however, all trusts (which are UK Reporting Financial Institutions) must register with HMRC, regardless of where their account holders are resident and whether they have any annual reporting to do under the CRS. For Trustee-Documented Trusts, these entities must now register in their own right, rather than rely on a trustee which is a Reporting Financial Institution to comply on their behalf.

The registration will be via HMRC’s automatic exchange of information (AEOI) portal and affected parties must register by the later of 31 December 2025 or 31 January in the year following the calendar year in which they fall within the CRS or FATCA rules. HMRC have, this October, released guidance providing further detail on the revised reporting regime, the key points of which to note are as follows⁵. 

• For Reporting Financial Institutions that are already registered for AEOI (either CRS or FATCA), no further action is required.
   
• The registration is a one-off requirement. Once an entity has registered for the AEOI service it will remain registered for subsequent years unless it deregisters from the AEOI service.
   
• If an entity registers for the AEOI service and has no Reportable Accounts, there is no obligation to submit a nil return, although the entity may choose to do so.
   
• When registering a Trustee-Documented Trust for AEOI, the Trustee-Documented Trust should be shown as the Reporting Financial Institution, not the trustee. The reporting trustee should be named as a contact.

Separate HMRC guidance sets out the information which is needed to register. 

In many circumstances, practically speaking, the information which will need to be reported as part of this one-off registration requirement for UK trusts should be information which has already been provided to HMRC (for example, under other UK transparency initiatives, like the TRS, or simply as part of the trust’s usual UK tax compliance).

It is clear from the Government’s response to the 2024 consultation that, for now, it will not be extending CRS reporting to cover UK resident “account holders” – i.e. there will be no requirement for UK Reporting Financial Institutions to report on UK residents (provided they are not dual resident in another CRS jurisdiction, in which case reporting may apply). However, the Government will continue to work with stakeholders to further explore this issue “before any decision is taken at a later point to require domestic reporting”. 

2.    Penalties

The 2025 Regulations also align the CRS’s penalty framework with that of other AEOI regimes, such as the CARF. The new rules, which replace the CRS’s existing penalty regime, set out different categories of penalties – including, for failure to register with HMRC, filing late returns and failure to notify Reportable Persons that information about them has been submitted to HMRC etc. The penalties introduced are all civil (as opposed to criminal) and there will be no penalties if HMRC is satisfied that there is a reasonable excuse for a failure to comply (for example, if the Financial Institution has made several attempts to contact a Reportable Person without success).

The two changes identified above came into force with effect from 16 July 2025.

3.    Further changes

In addition, the 2025 Regulations:

• introduce new (and alter existing definitions of) relevant terms which limit the reach of the CRS in some respects (for example, most charities should now be excluded from the CRS’s scope) but broaden this in other ways (such as including within the CRS’s ambit accounts holding certain digital financial products, including electronic money products and central bank digital currencies, as well as direct investments in cryptoassets in some instances, although subject to interaction with the CARF); and

• enhance due diligence requirements; for example, account holders and Controlling Persons are required to provide valid self-certification certificates in certain circumstances, which must be collected when onboarding with a UK Financial Institution or within a specified timeframe. As part of the self-certification process, any account holder (whether an individual or entity) who is dual resident for tax purposes must declare all jurisdictions of residence and the UK Reporting Financial Institution must treat their account as a Reportable Account in respect of each relevant jurisdiction. Currently, dual resident account holders can rely on tiebreaker rules contained in applicable tax conventions to determine their residence for CRS purposes; however, from 1 January 2026, the tiebreaker approach will no longer apply, and (as above) all relevant jurisdictions must be declared.

The above changes will come into force from 1 January 2026.

Next steps and final thoughts

The above changes mark an expansion of the CRS regime in some respects, although welcome reductions in its scope - for example, regarding charities – are also introduced. However, the introduction of wider mandatory reporting under the CRS is a major step-up and those affected, particularly trustees of relevant trusts, should ensure they comply with the new registration requirements before 31 December 2025, where relevant. 

The above is a high-level overview of a complex area. If you require specific advice, please get in touch with your usual Macfarlanes contact.

¹ This is a defined term in the CRS and includes traditional financial institutions such as banks, but the definition can also encompass companies, trusts and partnerships.

² Broadly, this means the persons who exercise control over a relevant entity (e.g. a trust, partnership, foundation etc.), although there is a specific definition which does not always require control in practice; in the case of a trust this typically includes the settlor, protector, trustees and certain beneficiaries of the trust.

³ Again, this is a defined term and, broadly, includes all UK Financial Institutions which are not a “Non-Reporting Financial Institution” (such as Government entities and “Trustee-Documented Trusts”; see further below).

⁴ i.e. a trust where its trustee is a Reporting Financial Institution which reports all information required to be reported for that trust.

⁵ For more detailed guidance, note that HMRC have this November updated their International Exchange of Information Manual, to reflect the amended CRS.