FATCA / CRS classification

Self certification form

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I come across these FATCA self-certification forms every now and then, and it doesn't matter how many times I complete them, each time I start from a position of confusion.

This time I am dealing with a company which I am satisfied is a "Non-Financial Entity", but the remaining doubt is which of "active" or "passive" should be ticked.

HMRC attempts to provide some guidance at IEIM404040, here

https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-infor...

This contains some bullet points listing conditions to qualify as "Active" which, if qualifying, provides exemption from certain additional disclosure regarding controlling persons contrasted with "Passive".

None of the bullet points apply in my case with the possible exception of the first one:

"It is active by reason of income or assets. This requires less than 50% of its gross income for the preceding calendar year or other appropriate reporting period to be passive income [see IEIM404020] and less than 50% of its assets held in the same period to be assets that produce or are held for the production of passive income".

The problem with this is that the first sentence separates "income" from "assets" by the boolean operator "OR", while the second sentence, which appears to be an expansion on the first, separates those same criterea by "AND".

So which is it: "OR" or "AND"?

In my case the majority of the income is "Active", but the majority of its assets on the balance sheet are "Passive".

With kind regards

Clint Westwood

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