Jersey information exchange and U.S. trust reporting

Jersey's Common Reporting Standard

Jersey describes the Common Reporting Standard (CRS) as a global standard for automatic exchange of financial account information.

The Comptroller of Taxes accepts consolidated reports containing information reportable to multiple jurisdictions, and single jurisdiction reports may also be submitted. Jersey says a filer remains responsible for identifying the jurisdiction to which information is transmitted. Separate FATCA and CRS reports are required, including when a client is resident in both the United States and a CRS jurisdiction.^[3]

Reporting for the preceding reporting year remains under the original CRS, while CRS version 2.0 introduces updated requirements.^[3]

FATCA agreement status for Jersey

The U.S. Treasury table lists Jersey's FATCA intergovernmental agreement as Model 1 and gives its status as In Force.

Beneficial ownership and trust registers

Registration of trust company service providers with the Jersey Financial Services Commission is distinct from registration of individual trusts or their beneficial owners.^[1][3]

Trust company service providers carrying on trust company business register with the Jersey Financial Services Commission.^[1]

IRS reporting for U.S. persons connected with foreign trusts

Several IRS information reporting rules can apply to a U.S. person who creates or transfers property to a foreign trust, is treated as its owner, or receives a distribution. The IRS lists Forms 3520 and 3520-A, Form 8938, and FinCEN Form 114, known as the FBAR.^[6]

Form 3520

The IRS says U.S. persons file Form 3520 to report certain transactions with foreign trusts and ownership under the grantor trust rules. Filing situations include creating or transferring property to a foreign trust, receiving a distribution, or being treated as the U.S. owner. A separate form is required for transactions with each foreign trust under the Form 3520 instructions.^[6][7]

Form 3520-A

For a U.S. person treated as an owner under the grantor trust rules, the IRS says the foreign trust must file Form 3520-A and furnish annual statements to U.S. owners and beneficiaries. If the trust does not file, the U.S. owner must attach a substitute Form 3520-A to a timely filed Form 3520 and furnish the required statements.^[6]

Form 8938 and FBAR

The IRS says Form 8938 may be required when the total value of specified foreign financial assets in which a U.S. person has an interest exceeds applicable reporting thresholds. Separately, a financial interest in or signature authority over a foreign financial account may require annual reporting on FinCEN Form 114, the FBAR. The IRS says these obligations are separate from exceptions to filing Forms 3520 and 3520-A.^[6]

For beneficiaries, the IRS states that a U.S. beneficiary receiving a distribution from a foreign nongrantor trust generally reports the beneficiary's share of distributable net income. The type of beneficiary statement depends on whether the trust is treated as a grantor or nongrantor trust, and Form 3520 instructions address reporting when a statement is absent.^[6]

Jersey and U.S. tax treaty information

The IRS describes income tax treaties as agreements that can change how specified income is taxed across borders. A treaty may change the tax treatment of specified cross-border income, subject to its terms and applicable law.^[5]

For U.S. citizens, treaty provisions apply to specified income under the relevant country's treaty terms. If a treaty does not cover a type of income, or no treaty exists between the United States and the other country, the applicable U.S. return instructions provide the tax treatment and rates. The IRS points readers to Treasury treaty documents for further information and to a treaty table for general effective dates.^[5]

Treasury explains that FATCA requires foreign financial institutions to report information to the IRS about accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. Institutions can register directly with the IRS under FATCA regulations or comply with intergovernmental agreements treated as in effect in their jurisdictions. Treasury's Jersey entry identifies Model 1.^[4]

Separate U.S. foreign trust rules may apply to a U.S. person who creates a foreign trust or transacts with one. The IRS defines a U.S. person to include a U.S. citizen or resident, and says consequences can depend on grantor trust ownership, beneficiary status, or transactions involving the trust. Forms 3520 and 3520-A, Form 8938, and FinCEN Form 114 are among the reporting regimes that can apply. Form 3520 is generally required in specified cases, including creation of or transfer of property to a foreign trust, receipt of a distribution, or treatment as its U.S. owner.^[6]

A U.S. person treated as an owner under grantor trust rules is generally taxed on the trust's income. In general, a U.S. beneficiary receiving a distribution from a foreign nongrantor trust reports the beneficiary's share of the trust's distributable net income. These possible tax and filing duties arise from a person's connection to a foreign trust, separately from treaty treatment for specified cross-border income and Jersey's Model 1 FATCA listing.^[6]

Questions and answers

Related resources

Related glossary terms

• Section 679: Section 679 addresses certain transfers by U.S. persons to foreign trusts. It treats some property transfers as ownership when the trust has a U.S. beneficiary.
• Reporting financial institution: The Common Reporting Standard classifies a financial institution as reporting when it falls within the relevant jurisdiction's rules and is not non-reporting.
• Section 6048: Section 6048 sets information reporting rules for certain foreign trusts. Its parts cover notice of events, U.S. owner duties and beneficiary distributions.

Related articles and guides

• Mauritius reporting rules and U.S. foreign trust forms: Mauritius publishes CRS and beneficial ownership reporting rules. U.S. citizens who own or receive distributions from a foreign trust file the IRS forms.
• Bermuda reporting and U.S. foreign trust forms: Bermuda exchanges financial account information under CRS and FATCA. U.S. persons connected with foreign trusts there file the IRS forms for trust reporting.
• Guernsey reporting and U.S. foreign trust forms: Guernsey's information exchange and reporting frameworks, with the IRS rules that apply to U.S. citizens who own or benefit from a foreign trust there.

Tools and official documents

• FATCA agreement lookup: Look up any jurisdiction in the U.S. Treasury FATCA table and see its agreement model and status as the Treasury lists them, with a link to the source.
• IRS and FinCEN forms: reference pages: Reference pages for 15 IRS and FinCEN forms tied to foreign trusts, foreign accounts and entities, built from the official forms and their instructions.

Related pages

• Jersey: overview: Start page for this jurisdiction.
• Trust legislation
• Types of trusts
• Trustee regulation and licensing
• Taxation of trusts