Banking Privacy in 2026: CRS, FATCA, and What Expats Need to Know

For decades, offshore banking carried a particular mystique — the suggestion that assets held in Switzerland, the Cayman Islands, or the Channel Islands were beyond the reach of domestic tax authorities. That era is definitively over. The global financial system now operates on the basis of automatic, comprehensive exchange of financial account information between governments. Understanding how this system works is not just important for compliance — it is increasingly fundamental to understanding the actual benefits and risks of offshore banking.

The end of banking secrecy

The shift began in earnest following the 2008 financial crisis and the political focus on tax avoidance that followed. The US led the charge with FATCA in 2010, and the OECD followed with the Common Reporting Standard in 2014. By 2026, over 100 jurisdictions participate in automatic information exchange, covering the vast majority of offshore banking assets globally.

The practical consequence is simple: if you have a bank account in another country and you are a tax resident somewhere, your bank is almost certainly reporting that account to your home tax authority. This is automatic, annual, and comprehensive. You do not receive a notification when the report is filed.

This does not mean offshore banking is problematic or should be avoided. It means that offshore banking must be approached transparently, with proper declaration of all accounts on the relevant tax returns.

FATCA: the US framework

The Foreign Account Tax Compliance Act (FATCA) was enacted by the US Congress in 2010 and came into effect in 2014. It requires foreign financial institutions to identify accounts held by US persons — US citizens, green card holders, and US tax residents — and report those accounts to the Internal Revenue Service (IRS).

FATCA obligations apply globally. Every bank in every participating country must:

• Collect documentation from new customers to identify US persons (typically a W-8BEN or W-9 form)
• Report accounts held by US persons to the local tax authority (which then shares with the IRS via intergovernmental agreements)
• Withhold 30% from certain US-source payments to non-participating institutions

For US persons living abroad, FATCA works in conjunction with FBAR (the Foreign Bank Account Report, filed via FinCEN Form 114) and the FBAR-adjacent requirement on Form 8938 (Statement of Specified Foreign Financial Assets, filed with the annual tax return). US persons must report foreign accounts where the aggregate balance exceeds certain thresholds — US$10,000 for FBAR, higher thresholds for Form 8938. Failure to file carries severe penalties.

Non-US persons are not directly subject to FATCA reporting to the IRS, but they are still affected in that their banks collect FATCA classification documentation and the administrative burden of FATCA compliance has made many foreign banks reluctant to serve US persons at all.

CRS: the global standard

The OECD's Common Reporting Standard (CRS), finalised in 2014 and progressively implemented from 2016, is the international equivalent of FATCA and operates on a multilateral basis. Unlike FATCA (which reports to the US only), CRS creates a network of bilateral exchange relationships between participating countries.

Under CRS, a bank in, say, Guernsey identifies all account holders who are tax resident in a participating jurisdiction, and sends their account details to the Guernsey tax authority, which then forwards the information to the relevant country's tax authority. A UK resident with a Guernsey account will find their details automatically reported to HMRC. A French resident with a Swiss account will have details reported to the French tax authority.

The CRS reporting population covers individuals and entities that are financial account holders — including current accounts, savings accounts, investment accounts, insurance products with cash value, and offshore investment bonds. Custodial accounts holding securities are also in scope.

CRS reporting fields include:

• Account holder name, address, date of birth, country(ies) of residence
• Tax identification number (in the UK, this is typically the National Insurance number)
• Account number and reporting financial institution
• Year-end account balance
• Total interest, dividends, and gross proceeds credited during the reporting year

This information is sent annually for every in-scope account. HMRC receives and processes this data and has the capacity to cross-reference it against self-assessment tax returns. Where discrepancies are identified, investigation follows.

DAC6: EU mandatory disclosure

For those with EU connections — whether as tax residents, EU property owners, or participants in cross-border transactions involving EU member states — DAC6 adds an additional layer of disclosure. The EU Directive on Administrative Cooperation (DAC6), which came into force in 2020, requires mandatory disclosure of cross-border tax arrangements that meet certain criteria (known as "hallmarks").

DAC6 applies to intermediaries (lawyers, accountants, financial advisers, banks) who design, market, or implement certain cross-border tax arrangements. The hallmarks are broad and include arrangements involving secrecy, standard fee structures, use of preferential regimes, and certain complex structures. Disclosure is to the tax authority of the relevant EU member state.

For the individual expat, DAC6 primarily means that advisers may ask more detailed questions about the purposes of certain arrangements, and that some structures which would previously have been implemented quietly are now disclosed to EU tax authorities. If you are taking professional advice on cross-border planning involving EU jurisdictions, DAC6 may be relevant.

What information is actually shared — and what is not

It is worth being precise about the scope of information exchange. CRS and FATCA reporting covers:

• Financial accounts: current accounts, savings accounts, investment accounts, custodial accounts, certain insurance products
• Balance and income: year-end balance and interest/dividends received
• Account holder identification: name, address, TIN, date of birth, country of residence

CRS does not automatically share:

• The full transaction history of the account (though tax authorities can request this separately if they open an investigation)
• Details of assets not held in financial accounts (real estate, physical assets, art, jewellery — though real estate ownership is often reported separately via land registries and property tax systems)
• Information held by non-participating jurisdictions

The practical implication is that tax authorities have a snapshot of your offshore financial wealth and income each year — sufficient to identify unreported accounts or income, but not a complete picture of every transaction.

The risk of non-disclosure

The only meaningful risk associated with offshore banking in the post-CRS world is non-disclosure. If you hold offshore accounts and declare them correctly on your tax returns, paying any tax due, there is no additional risk from automatic information exchange — it simply confirms what you have already reported.

If you hold offshore accounts that are not declared, the combination of CRS reporting and HMRC's data-matching capabilities creates a significant risk of detection. HMRC has been active in pursuing offshore non-compliance through its Connect system, which matches data from information exchange against self-assessment returns.

Penalties for offshore tax evasion are severe:

• Failure to notify penalties can reach 200% of unpaid tax in cases involving deliberate evasion using certain non-cooperative jurisdictions
• Criminal prosecution for tax evasion is a real possibility for significant undeclared offshore assets
• The Requirement to Correct legislation imposed additional penalties on those who did not come forward before 30 September 2018 — HMRC views this history as evidence that anyone still undeclared has had ample opportunity to come forward

HMRC operates the Worldwide Disclosure Facility, which allows taxpayers to disclose previously undeclared offshore matters. Disclosures made voluntarily attract lower penalties than those prompted by HMRC enquiry. Anyone with undisclosed offshore assets should seek professional advice immediately.

Which jurisdictions still do not participate fully?

As of 2026, a small number of jurisdictions have not fully implemented CRS. The most significant is the United States, which operates FATCA but does not participate in CRS reciprocally in the same way — meaning the US does not automatically send information to other countries' tax authorities under CRS. This has attracted criticism and there is ongoing international pressure for broader US participation.

A handful of smaller jurisdictions also have limited or delayed implementation. However, the practical reality for any major offshore banking centre is full CRS compliance. Switzerland, the Cayman Islands, BVI, Isle of Man, Jersey, Guernsey, Luxembourg, Singapore, Hong Kong, and all EU member states fully participate.

The legitimate case for offshore banking

None of the above should be read as a reason to avoid offshore banking. There are many legitimate, compliant, tax-efficient reasons to hold accounts offshore — including managing multiple currencies, providing a banking hub outside a high-tax or politically unstable country of residence, facilitating international property transactions, and supporting internationally mobile lifestyles.

The key is transparency. Offshore banking that is properly declared is straightforwardly legal and, in many cases, tax-efficient. The compliance framework that CRS and FATCA have created is designed to ensure that the tax system captures what it is entitled to — not to penalise those who use offshore structures for legitimate purposes.

How Global Investments can help

Global Investments has advised internationally mobile clients on offshore banking and reporting compliance for over 32 years. Our advisers understand the CRS and FATCA landscape and can help you structure offshore banking arrangements that are compliant, efficient, and properly integrated with your overall tax position.

We work with qualified tax advisers in the UK and internationally to ensure that any offshore accounts or structures you hold are correctly reported and that your affairs are managed transparently and in your long-term interests. Contact us to discuss your offshore banking and reporting obligations.