Paragraph 264(1)(c)
Administrative Policy
Guidance on enhanced financial accounts information reporting 20 June 2014
9.10 When a holder of a preexisting individual account maintained by a financial institution opens a new account with that institution (or another financial institution if it and the first-mentioned institution are sponsored by the same sponsoring entity), there is no need to re-document the account holder as long as:
- the appropriate due diligence requirements have been carried out, or are in the process of being carried out, for the preexisting individual account;
- and when a threshold has been applied in connection with the preexisting individual account, the financial institution's computerized systems are able to link the new account to the preexisting individual account held by the account holder and allow the account balances or values to be aggregated.
Example
An individual holds a preexisting individual account with a balance that was US$35,000 on June 30, 2014. The individual opens a new account at the same financial institution. The institution applies the US$50,000 threshold and is able to link the new account to the preexisting account. The new account may be treated as a continuation of the preexisting account and can continue to be treated as exempt until such time as the aggregate balance or value of the accounts exceeds US$1,000,000.
Articles
Candice M. Turner, "Answers to Practical FATCA Questions for Canadian Financial Institutions", Tax Management International Journal, Vol. 43, No. 8, August 8, 2014, p. 484.
Opening of 2nd account by holder of pre-existing account (p. 486)
The use of the Treasury Regulation definition of "preexisting obligation" is not specifically addressed, in the IGA, the implementing legislation, or the official explanatory notes to the implementing legislation (the "explanatory notes"). However, the CRA Guidance provides that where a holder of a pre-existing individual account opens a new account with the same financial institution, there is no need to re-document the account so long as the due diligence requirements have been or are in the process of being carried out and, where a threshold has been applied in connection with the pre-existing account, the financial institution's computerized systems are able to link the new account to the pre-existing account. [fn 10: Reg. §1.1471-1(b)(98)(ii).] In effect, this would incorporate the expanded definition in the Treasury Regulations without the requirement that the two, accounts be treated as "consolidated obligations."…