Tax information 

In an effort to combat tax evasion, Automatic Exchange of Information (AEOI) regulations have been introduced by governments around the world to increase the transparency of financial affairs and for information to be exchanged between governments and tax authorities of different countries.

Here you will find some answers to common questions about the regulations, what M&G are obliged to do and how this may impact you.

Is M&G the only company to be affected?

No, all financial institutions (eg banks, insurers, investment managers) need to comply with these regulations.

What are the AEOI regulations?

There are two sets of regulations which M&G and other similar financial institutions are obliged to comply with: FATCA (Foreign Account Tax Compliance Act) and the CRS (Common Reporting Standard).

FATCA was introduced by the United States to identify US persons (US citizens, residents or entities) who use non-US funds and other non-US financial organisations to avoid paying US tax on their income and assets. The regulations require non-US financial institutions to report information about US persons to the tax authorities where their investments are held. The tax authorities will then pass this information to the US Internal Revenue Service.

CRS regulations expand on FATCA and require information to be passed to other countries that have signed up to the CRS. Information about any person who is tax resident in a country that has signed up to the CRS, who holds an investment in a foreign CRS country will be reported to the foreign tax authority where their investment is held. That foreign tax authority will then pass details about that person to the tax authority where the person is tax resident.

What do I need to do?

If you are a new investor, the information we need to collect will be requested as part of the application process, whether by telephone, application form, or online.

If you are an existing investor, we may contact you by post to obtain any additional information we require.

What if I hold my investment jointly?

Each holder will be asked to provide information about themselves to determine their tax status.

What if I hold the investment in trust for a beneficiary?

If the investment is held on behalf of a trust, the trust will be treated as an entity holding the investment. The trust will need to determine its tax status for AEOI purposes and we will send you the relevant forms to provide us with this information. We may also need to know further details about the other trustees and beneficiaries.

Please contact your tax adviser or the Society of Trust and Estate Practitioners if you have any questions about the tax status of the trust.

What information will be reported about me?

If M&G is required to report information about you, the following information will be reported:

  • Name
  • Address
  • Date of birth
  • Taxpayer Identification Number
  • M&G Account number
  • Account balance or value as of the end of the calendar year (or other reporting period)
  • Gross income paid or credited to the account and aggregate amount of redemption payments made

What will M&G need to do?

On an annual basis, M&G will be required to report information on investors who are tax resident in either the United States or any country that has signed up to the CRS. This will apply to both existing investors and new investors. This information will be passed to the local tax authority where the M&G fund is located and that local tax authority will pass the information to the foreign tax authority where the investor is tax resident. As an example, our UK funds will report information about a French investor to HM Revenue & Customs (HMRC), who will pass this information to the French tax authorities.

We are required to review our investor base to determine who may be reportable. As far as possible we will try to do this based on information we already have about you but we may need to write to you to request further information or documentation if we have any doubt about your tax status.

What will M&G do if I do not provide the information when requested?

M&G is committed to being fully compliant with all tax regulations.

Consequently, we may not accept your investment if you choose not to send us the documentation we require to establish your tax status.

If information is not provided when requested, we will need to report all of the information we hold about you to the local tax authorities who may share this information with multiple foreign tax authorities.

Where can I get more information?

If you have questions about a request for information you have received from us, or have any concerns about whether the enquiries you have received are genuine, please call our Customer Relations team on 0800 390 390. Please be aware that we are not in a position to give you tax advice or investment advice.

If you would like to understand more about AEOI, you can visit the following websites for further information:

HMRC have issued guidance which explains why you are being asked questions about your tax residence status. This can be found by searching for ‘automatic exchange of information’ here https://www.gov.uk/

You can also visit The Organisation for Economic Co-operation and Development (OECD) portal on Automatic Exchange of Information here http://www.oecd.org/tax/automatic-exchange/