CRS / CFC stocktake: take stock first, then decide whether to move

01It does only the first of three steps

The sequence set out in our article is take stock → assess the gap → then redesign. This workbook does the first step only, and deliberately not the other two — discussing changes before taking stock is treating assumptions as facts.

Why the order is worth insisting on: structural change is better done early than late, but it is far worse to act before the position is clear. Transferring shares, closing accounts, changing control — these actions leave a trail of their own, and a position that was controllable and explainable can become hard to explain because of one hasty adjustment.

02What the five sheets capture

Each sheet exists because of a specific way this goes wrong:

• Read this first — what the workbook answers and what it does not.
• Residence — the starting point for everything else. The two jurisdictions apply different tests, and you can be treated as resident in both, in which case the treaty tie-breaker applies. Until residence is settled, nothing downstream can be assessed.
• Accounts and holdings — the point here is that identification is not limited to personal accounts. The controlling persons behind a company account are within scope as well: putting a company in between does not change the look-through logic. So this sheet covers accounts held in company names too.
• Offshore entities — control, effective tax burden and substance are looked at together. An entity enjoying a local exemption has a low effective burden, which makes attention more likely rather than less — and that interacts with investment promotion.
• Filing gaps — a gap that already exists matters more than any future arrangement. It is an accomplished fact, and it gets harder to deal with the longer it is left.

03Why every conclusion column is left blank

Almost every judgement here depends on the individual case: how residence is determined, which situations create an entity that must be looked through, how control and tax-burden tests are computed. Building a sheet that lets you tick your way to a conclusion would be the genuinely harmful thing to do — so every cell involving a judgement is amber, and what goes in it is "to be determined", not an answer.

You record the facts (which accounts exist, who holds what, whether profits were distributed); an adviser reaches the conclusion. That division does not work in reverse.

04One thing to note before you start

This workbook will end up holding personal account and shareholding information. It is your own internal material. Keep it as such and do not send it over an unprotected channel; when you want our help with the assessment, we will agree a secure way to hand it over.

The tests, thresholds and exemptions follow the rules and practice currently applied in both jurisdictions. This workbook states no percentages or threshold figures; an individual position has to be assessed by our advisers against residence and the specific facts.