Common Reporting Standard

The Common Reporting Standard was issued last year but guidance has only recently been released which outlines the requirements for Charities. The main impact will be for grant-making charitable trusts.


The Common Reporting Standard is aimed at increasing international tax transparency by creating an automatic exchange of information between the relevant tax authorities.  Whilst it’s aimed primarily at banks and the financial services industry, charitable trusts are included within the regime if they fulfill certain conditions, and so may have to report to HMRC with details about their grant holders.


Charities will be considered to be financial institutions if they receive more than 50% of their income from investments and where any of those investments are externally managed by a financial institution under a discretionary mandate. If the Charity falls within the Common Reporting Standard, it will need to establish the tax residency of any organisations or individuals it makes grants to. If it makes grants to other charities registered in the UK, then this will satisfy the requirement but the Trust will need to demonstrate that it has checked the registration.  Where there is a requirement for the Charity to report the payment of a grant to an individual or organisation whose tax residency is in a reportable jurisdiction, it will need to register with HMRC.  Any payments made in the previous calendar year to these entities will need to be reported by the end of May.


Further guidance is available from , and from the