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Tax File Number Guidelines Review - draft information sheet containing frequently asked questions

 

Information for stakeholders

As part of the review of the Tax File Number Guidelines (TFN Guidelines), the Office of the Australian Information Commissioner (OAIC) has prepared the following draft guidance material in the form of an information sheet featuring frequently asked questions (FAQs) about the draft revised TFN Guidelines. It incorporates the relevant guidance that is currently found in Commissioners Notes and Compliance notes as well as new material.

The information sheet would be advisory only and not legally binding. It is based on the OAIC's understanding of how the Privacy Act (1988) (Cth) (Privacy Act) works and provides explanations of some of the terms used in the TFN Guidelines and good practice or compliance tips. It is intended to help TFN recipients apply the TFN Guidelines in ordinary circumstances. TFN recipients may need to seek legal advice on the application of the Privacy Act to their particular situation.

For the purposes of the review, the OAIC would like to know whether or not this draft information sheet effectively achieves these aims and how it could be improved.

Previously released guidance materials

Commissioner's Notes

The annotated version of the existing TFN Guidelines includes a number of Commissioner's Notes which appear under the TFN Guidelines in italics.  The Commissioner's notes are not legally binding, but are intended to assist in interpreting the TFN Guidelines. The annotated version of the TFN Guidelines is available from the OAIC's website:

http://www.oaic.gov.au/law/tax-file-numbers.html

Tax File Number Compliance Notes

The former Office of the Privacy Commissioner in 1989 and 1990, issued three compliance notes intended to assist those affected in interpreting the guidelines and do not have the force of law. The current Tax File Number Compliance Notes are also available at http://www.oaic.gov.au/law/tax-file-numbers.html

This information sheet

The Commissioner's Notes have been completely removed from the draft revised TFN Guidelines. It is intended that, the Compliance Notes will be archived and removed from the OAIC website. It is the OAIC's intention that the Commissioner's Notes and the Compliance Notes will be replaced by this information sheet, which would be released simultaneously with the amended TFN Guidelines. 

Stimulus questions for stakeholder feedback

The OAIC has prepared the questions below on matters that could be considered in developing and refining the information sheet/FAQs for the draft revised TFN Guidelines. 

The questions are intended to stimulate stakeholders' comments and reflections, rather than to confine the issues that may be raised.  You may wish to respond to some or all questions, or to raise other issues in line with the aims of the OAIC's review.

  1. Is this information sheet helpful, easy to read, accessible to the general public, and does it provide adequate assistance to you in interpreting the TFN Guidelines?
  2. Is this information sheet a useful and relevant substitute for guidance material currently found in the Commissioner's Notes and the Compliance Notes?
  3. Are there any forms, brochures or other external material of relevance to the handling of TFNs that you believe should be referenced in the information sheet?
  4. Is there any information that should be amended?
  5. Are there any other ways in which the information sheet could be enhanced?

Information sheet - The binding Tax File Number Guidelines and protecting tax file number information

Introduction

This information sheet outlines issues related to Tax File Numbers (TFNs) and the Tax File Number Guidelines (TFN Guidelines) issued under s 17 of the Privacy Act 1988 (the Privacy Act).  It also suggests, via frequently asked questions (FAQs), a number of steps individuals and TFN recipients, including investment bodies, should consider taking to help safeguard TFN information. 

These FAQs reflect the content of the TFN Guidelines following their review in 2011.  Relevant material contained in the previous Commissioner's Notes and the TFN Compliance Notes on Security, Investment Bodies, and Investment Bodies further advice (now archived), has also been incorporated into this information sheet.

This information sheet is not legally binding and should be read in conjunction with the binding TFN Guidelines. The purpose of this information sheet is to provide assistance in interpreting the TFN Guidelines.

The information sheet is divided into three parts:

Part A – aimed at individuals

Part B – aimed at people, government agencies and private sector organisations who are lawful TFN recipients

Part C – aimed at investment bodies.

PART A - For individuals:

1 What is a Tax File Number?

Tax file numbers (TFNs) are unique numbers created by the Australian Taxation Office (ATO). The ATO gives you, other people and organisations a TFN because it helps them handle your tax and administer Australian Government payments such as those given out by Centrelink.

Your TFN is given to you for life, so it is a very important number. 

TFN information is information that connects your TFN with your identity (for example, a document that links your name and date of birth with your TFN). 

Make sure that you:

  • keep your TFN information in a safe place
  • properly destroy any TFN information that you no longer need. This will help prevent other people stealing your identity. Don't just throw your old TFN information in the bin
  • report any lost, stolen or unauthorised access of your TFN information to the ATO.

2 Are there privacy rules about how my TFN information is handled?

Yes. 

The Australian Information Commissioner has written the TFN Guidelines which deal with how TFN information should be collected, stored, used, disclosed and kept safe.  All persons, agencies and organisations that are allowed to ask for TFN information must follow the TFN Guidelines. 

The Commissioner of Taxation (the head of the ATO) and the Australian Prudential Regulation Authority (APRA) have also released rules and advice about handling TFN information. This information is available from the ATO website.

3 Can just anyone ask for my TFN?

No.

There are very strict rules about who is allowed to ask for your TFN.  The TFN Guidelines only allow certain people, government agencies and organisations who are authorised by law to ask for your TFN.

The ATO and APRA are required to make information available that identifies people, agencies and organisations allowed by law to request and handle TFNs. (See Part B, FAQ 15). One way they make information available is by maintaining a list of those people, agencies and organisations allowed to ask for your TFN, what they will do with it and who they can give it to.  The list includes:

  • the ATO
  • your employer (after you start work)
  • banks and other financial institutions
  • Centrelink
  • superannuation funds.

If you are not sure that the person, agency or organisation asking you for your TFN is allowed to ask for it, talk to the ATO.

4 Do I have to give out my TFN to someone even if they are allowed to ask for it?

No. 

There is no law in Australia that says you must give an authorised person, agency or organisation your TFN if they ask for it.

But, sometimes you may be disadvantaged if you don't give your TFN to someone who is allowed by law to ask you for it.

Examples

  • If you are claiming or receiving a benefit, Centrelink asks for your TFN so it can check the information you give them with the ATO and other departments that pay benefits. 

    If you do not give Centrelink your TFN, assistance payments may be withheld. Providing your TFN is a condition of receiving most Commonwealth government assistance payments.

  • If you don't give your employer, bank, other financial institution or superannuation fund your TFN, it may affect how much tax you pay and could result in tax deducted from your income or your interest payments at the highest marginal rate.

5 Is there any special information I should be told when an authorised person asks for my TFN?

Yes.

Generally, when an authorised person, agency or organisation asks you for your TFN, they should tell you:

  • why they are collecting it (including the laws that allow them to collect your TFN)
  • that it is not an offence if you do not give them the TFN
  • what will happen if you do not give them your TFN.

This information can be given to you in person, or included in a form. 

Remember: You can ask questions if you do not think you have been given enough information!

6 My TFN is on a document I have been asked to provide.  What should I do?

If you are asked for some information and the document includes your TFN, you are allowed to cross out or remove the TFN before you hand over this information.  You can do this even if the person or organisation is authorised to collect your TFN information.

Remember: You do not have to give anyone your TFN. But, if you do not give your TFN to a person who is authorised to ask for it there may be consequences.

7 Do I have to give my TFN (as part of an identity check) if I want to rent a flat or buy a car?

No. 

Your TFN should never be used as an identity check.  If someone wants to use your TFN in this way you can report them to the ATO.

Remember: Only authorised people, agencies or organisations are allowed to ask you to quote your TFN (see FAQ 3).

8 Can my TFN be collected when I earn income or invest my money?

Yes. 

You have the option of giving your TFN to an employer or investment body in relation to income that you have or will earn (either employment or investment income).  Deciding not to give your TFN may result in you paying tax on your relevant income (either employment or investment income) at the highest marginal rate.

TFNs can be collected in relation to the following investments:

  • interest-bearing accounts with a financial institution (like a bank, building society or credit union)
  • interest-bearing deposits (other than a deposit to the credit of an account) with a financial institution
  • loans of money to a government body or to a body corporate
  • deposits of money with a solicitor for the purpose of:
    • (a) being invested by the solicitor, or
    • (b) being lent under an agreement to be arranged by or on behalf of the solicitor
  • units in a unit trust
  • shares in a public company.

Remember: You do not need to give your TFN. You should be told this for each investment you consider making. The decision to give a TFN must always rest with you.

9 Who can I complain to if my TFN information is not handled properly?

If you think someone has not handled your TFN information properly, you can make a complaint to the Australian Information Commissioner.

Generally, before you can make a complaint, you must first complain in writing to the agency or organisation you believe has mishandled your TFN information. You must also give the agency or organisation a reasonable time (usually 30 days) to respond to your complaint. In some cases the Australian Information Commissioner may hold off investigating where an agency or organisation has advised you within the 30 days that it is taking action but has not yet provided a formal response.

If you are not satisfied with the response you receive, or if you do not receive a response, you can lodge a complaint with the Australian Information Commissioner.


PART B - For Tax File Number recipients:

This section of the information sheet is aimed at people, government agencies and private sector organisations who are Tax File Number recipients (TFN recipients).

1 What are TFNs?

The TFN Guidelines define 'tax file number' by reference to the definition in s 6 of the Privacy Act 1988 (Cth) (Privacy Act) and Part VA of the Income Tax Assessment Act 1936 (Cth) (ITAA Act). It generally means a unique number issued to the person by the Commissioner of Taxation under certain provisions of taxation law to identify individuals, companies and others who lodge income tax returns with the Australian Taxation Office (ATO).

The purpose of the TFN is to facilitate the effective administration of taxation law and certain aspects of personal assistance and superannuation law and not to assist with the identification of individuals for other purposes.

2 What is TFN information and what do the TFN Guidelines protect?

The TFN Guidelines protect the TFN information of natural persons only. They are not intended to protect TFN information relating to other entities, such as corporate entities, partnerships, superannuation funds and trusts. The Taxation Administration Act 1953 (Cth) (TA Act) on the other hand protects all TFNs, including of individuals.

Where TFNs are assigned to individuals, TFN information is information that connects a TFN with the identity of a particular individual (for example, a database record that links a person's name and date of birth with the person's TFN).

Specifically, s 8WA of the TA Act places restrictions on unauthorised requirements or requests that a person's TFN be quoted, while s 8WB places restrictions on the unauthorised recording, maintaining a record of, use or disclosure of a person's TFN.

3 What is a TFN recipient?

Under the TFN Guidelines, a 'TFN recipient' has the same meaning as a 'file number recipient' in s 11 of the Privacy Act andcovers any person, agency or organisation that is (whether lawfully or unlawfully) in possession or control of a record that contains TFN information. A TFN recipient also includes:

  • the Commissioner of Taxation (i.e. the ATO)
  • the following government assistance agencies:
    • the Department of Human Services (which includes Centrelink and Medicare)
    • the Department of Families, Housing, Community Services and Indigenous Affairs
    • the Department of Education, Employment and Workplace Relations
    • the Department of Veterans' Affairs
  • an authorised recipient i.e. lawful TFN recipients other than the government agencies outlined above, such as:
    • employers
    • employers in their capacity as employee share scheme (ESS) providers
    • higher education providers
    • investment bodies
  • an approved recipient i.e. lawful TFN recipients who are engaged by authorised recipients to provide services where it is reasonably necessary to have access to TFN information or who have obtained an individual's consent to access their TFN to help manage that individual's taxation, superannuation or personal assistance affairs. This can include the following:
    • solicitors
    • tax agents
    • accountants
    • share registries and agents of ESS providers
  • the trustee of a superannuation fund.

4 Why is it important to protect the privacy of TFNs?

It is important to protect the privacy of TFNs because they are unique identifiers which are issued to individuals for life.

Some of the privacy concerns associated with TFNs include:

  • they could potentially be used by all government agencies and private sector organisations as part of a national identification system
  • they could be used to link records of personal information held by many different agencies and organisations, enabling greater data-matching, data-sharing and data-linking
  • unregulated data-matching, data-sharing and data-linking could lead to serious breaches of personal privacy through the loss or misuse of data
  • the ability to link different sets of data through a unique identifier could increase the risk of identity theft.

5 Can anyone ask for and receive an individual's TFN?

No.

However, there are very strict rules about who is lawfully allowed to ask for and receive TFN information.  The TFN Guidelines only allow certain people, government agencies and organisations that are authorised by taxation, personal assistance or superannuation law to ask for and receive TFN information - they are known as authorised or lawful TFN recipients.

It is generally a criminal offence under the TA Act and a breach of the TFN Guidelines for anyone else to request an individual's TFN. If you are not sure that your agency or organisation is an authorised or lawful TFN recipient, more information is available from the ATO.

The ATO and APRA are required under the TFN Guidelines to maintain a list of those people, agencies and organisations allowed to ask for and receive TFNs, what they will do with it and who they can give it to. This list is known as the Classes of lawful tax file number recipientsdocument (see FAQ 15 below).

6 Do individuals need to provide their TFN to an authorised TFN recipient?

No. 

There is no law in Australia that says individuals must give an authorised person, agency or organisation their TFN if they are asked for it.

This forms the basis of what is known as the 'voluntary quotation principle', which recognises that neither taxation nor assistance agency nor superannuation laws make the quotation of a TFN a requirement. However, the financial consequences of not quoting it can be severe. For example, under personal assistance law, the quotation of a TFN is a condition for the receipt of assistance payments.

7 When can I collect an individual's TFN?

If an agency or organisation is authorised to collect individuals' TFNs they:

  • must tell the individual which law authorises them to collect this information, that it is not an offence to refuse to provide a TFN and the consequences of refusing
  • should not collect this information in an unreasonably intrusive manner
  • should only collect other information with the TFN that is necessary and relevant to the purpose of collection under applicable taxation, personal assistance or superannuation law.

Example

  • Mary works for an agency which is authorised to collect an individual's TFN under a personal assistance law. Mary's responsibilities include collecting clients' TFNs, so that her agency may make assistance payments to those individuals. She usually collects a clients' name, postal address and TFN.

    Under the TFN Guidelines, Mary may collect clients' TFNs if she gives them a form during office hours, which explains that she is authorised to collect this information under a particular personal assistance law, that it is not an offence to refuse to provide this information, but that an individual may not receive assistance payments if they decide not to provide this information. 

    She may also request the individuals' name and address to ensure that she can record the TFN against the correct record. 

8 How do the TFN Guidelines and other privacy obligations interact?

Unauthorised use, disclosure, collection, or requests for TFNs is an offence under the TA Act as well as constituting a breach of the TFN Guidelines.

Sections 8WA and 8WB of the TA Act create criminal offences for mishandling TFNs.  A person may be fined up to $11,000, or imprisoned for up to two years for a breach of these provisions.

Also, it is an interference with privacy under the Privacy Act to breach the TFN Guidelines.  Any person who thinks the TFN Guidelines have been breached may make a complaint to the Information Commissioner. However they should first raise this issue with the agency or organisation they believe has mishandled their TFN information, unless it is not appropriate to do so.

When requesting an individual's TFN, agencies and organisations also need to consider the notice obligations under Information Privacy Principle 2 or National Privacy Principle 1.

The Information Commissioner also has the power to conduct audits of TFN recipients under s 28(1)(e) of the Privacy Act.

Rules relating to TFNs are also partly contained in the ITAA Act. Furthermore, the Data-matching Program (Assistance and Tax) Act 1990 (Cth) provides for, and regulates, the matching of records between the ATO and the assistance agencies where the TFN is used in that matching process.

The obligations on TFN recipients in the TFN Guidelines are complementary to, but may overlap with, other obligations under the Privacy Act, taxation laws, secrecy laws and the Data-matching Program (Assistance and Tax) Act.

9 What should TFN recipients do if a person provides information which includes a TFN?

Under the TFN Guidelines, a TFN recipient may not record, use or disclose a TFN unless this is permitted under taxation, assistance agency or superannuation law.

If an individual is asked to provide information that incidentally includes a TFN, the TFN recipient should give the person the opportunity to remove the TFN before providing the other information.

If an individual provides information to a TFN recipient which includes a TFN, for a purpose not connected with the operation of a taxation, personal assistance or superannuation law and that information incidentally contains a TFN, the individual providing the information may remove the TFN.

If the individual does not remove the TFN, the TFN recipient must not use or disclose the TFN or record the TFN separately to the information provided by the individual.

A TFN recipient that has incidentally received TFN information will also need to consider the TA Act. Unauthorised use or disclosure of TFNs is an offence under the TA Act, as well as constituting a breach of the TFN Guidelines. Specifically, s 8WB places restrictions on the unauthorised recording, maintaining a record of, use or disclosure of a TFN.

However, subject to any other applicable laws (such as secrecy laws) TFN recipients may record, use or disclose this other information providing the TFN has already been removed or deleted.

Example

  • Several agencies receive and scan inbound correspondence which may incidentally contain TFN information. This would likely occur prior to the correspondence being identified as containing an individual's TFN information. The TFN information would then be 'recorded' even if there is no intention by the agency to retain this information. The agency must not use or disclose the TFN or record the TFN in a way that is inconsistent with the TAA or the TFN Guidelines.

10 What can an individual's TFN be used for?

Under the TFN guidelines, an individual's TFN can only be used for the purpose of facilitating the effective administration of taxation law and certain aspects of personal assistance and superannuation law and not to assist with the identification of individuals for other purposes.

For example, the ATO and other lawful TFN recipients may use a TFN to identify an individual when they:

  • lodge a tax return
  • apply for income assistance or support payments, such as pensions or benefits from either Centrelink or the Department of Veterans' Affairs
  • start a new job or change jobs
  • have savings accounts or investments that earn income, for example, interest or dividends
  • receive a payment under the Higher Education Loan Program
  • join a super fund.

TFNs may not be used:

  • by a bank to confirm an individual's identity
  • as part of a national identification system (unless this is authorised by taxation, personal assistance or superannuation law)
  • to match personal information about an individual (however this can be a lawful use in the right circumstances, for example, if it is authorised by taxation, personal assistance or superannuation law or by the Data-matching Program (Assistance and Tax) Act.

11 How can my agency or organisation protect the security of TFNs?

Under the TFN Guidelines, TFN recipients need to take reasonable steps to safeguard TFN information from loss, unauthorised access, use, modification, disclosure or other misuse, whether the information is stored in physical or electronic form.

This could involve maintaining:

  • Physical security – by implementing physical barriers and measures such as:
    • appropriate building security to prevent unauthorised entry to premises
    • locked filing cabinets and secure containers for storing paper-based records containing TFNs
    • systems including audit trails to detect unauthorised access.
  • Computer and network security – by adopting logical barriers and measures to protect computer systems and networks from unauthorised access, modification and disclosure such as:
    • user identity checks and password controls
    • separately storing, processing and transmitting TFNs from other information handled by the agency or the organisation.
  • Communications security – by protecting communications via data transmission, (including email and voice communications), from interception, and preventing unauthorised intrusion into computer networks
  • Personnel security - by adopting procedural and other measures for limiting access to records containing TFNs to authorised staff for approved purposes and adopting controls to minimise security risks to an agency's or organisation's IT systems.

Whether particular steps are reasonable will depend on the particular circumstances of the TFN recipient.

12  How can my agency or organisation limit access to tax file numbers?

TFN recipients need to restrict access to records containing TFN information to staff who need to handle this information under taxation, personal assistance or superannuation law.

This could be achieved by, for example:

  • training staff and management in security awareness, practices and procedures in relation to TFNs
  • developing policies on who can access and use records containing TFNs
  • implementing a clean desk policy and requiring staff to securely store all files containing TFNs after use
  • implementing access controls for authorised users, such as user passwords, screen saver passwords and limiting access to shared network drives to authorised staff.

13  What is involved in securely disposing of TFN information?

TFN recipients should dispose of TFN information where they are no longer required by law to retain the information or the TFN information is not necessary for a purpose under taxation, personal assistance or superannuation or assistance agency law (including the administration of such law).

To protect individuals' privacy, this information should be destroyed by secure means.

Garbage disposal of intact documents leaves personal information extremely vulnerable to unauthorised access and misuse.  This method of disposal should be avoided.  Instead, for paper based records, secure disposal could include:

Electronic records that are no longer needed should be deleted using a strong digital wipe utility. TFN recipients should be aware that it is very difficult to reliably remove all traces of electronically stored information and that deletion may only remove the file-reference but leave all the other information intact.

14  How can I make staff aware of their obligations under the TFN Guidelines?

Appropriate staff awareness activities may include:

  • conducting regular staff training sessions
  • reminding staff who regularly handle TFN information of their obligations under the TFN Guidelines and taxation laws during staff meetings, by email or in a staff bulletin
  • requiring staff to review the TFN Guidelines and these FAQs.

15  How does the ATO, APRA and assistance agencies make information about their TFN handling practices publicly available?

Under the TFN Guidelines, the ATO, APRA and assistance agencies such as Centrelink need to issue publicly available information about:

  • the purposes for which TFNs may be required or requested
  • when TFN information may not be collected, recorded, used or disclosed
  • penalties applying to unauthorised handling of TFNs
  • where to find further detail about these matters.

The Commissioner of Taxation (i.e. the ATO) and APRA also need to identify the types of entities who may request TFNs under taxation and superannuation law. The main way they make this information available is by maintaining a list of those people, agencies and organisations allowed to ask for and receive TFNs, what they will do with it and who they can give it to. This list is known as the Classes of lawful tax file number recipientsdocument, and it is attached to the annotated version of the TFN Guidelines available on the OAIC website.

Examples of lawful TFN recipients include:

  • the ATO
  • the Department of Human services (which includes Centrelink and Medicare)
  • an employer (after an individual starts work)
  • banks and other financial institutions
  • superannuation bodies
  • higher education providers
  • tax agents, accountants and solicitors.

The ATO and APRA may also use their website and other publications to make this information available.

Also, APRA may issue approvals as to the manner of quoting, requesting, and transferring TFNs for the purposes of the Superannuation Industry (Supervision) Act 1993 pursuant to Part 25A of that Act and various sections of the Retirement Savings Accounts Act 1997.

Examples

  • The ATO has issued:
  • APRA has issued:
    • [Any other forms/ brochures?]
  • Centrelink/Department of Human Services has issued:
    • [Any other forms/ brochures?]
  • Other agencies/organisations?
    • [Any other forms/ brochures?]

PART C - For investment bodies:

1 Can investment bodies collect an individual's TFN?

Yes

However, under the TFN Guidelines no-one is required by law to quote their TFN in relation to investments, although there may be financial consequences for individuals who do not.

The collection and use of TFNs by investment bodies to build up a database or to cross-match personal information is not permitted.

The legal basis for collection should always be made clear, including the laws that allow them to collect the TFN. Collection includes when individuals give their TFN either in written form or over the telephone.

Remember

  • the forms used to collect TFN information should comply with the Guidelines on the preparation of TFN forms which can be accessed on the ATO website.

2 Do investment bodies need to ask for an individual's TFN at the time each new investment is taken out?

Generally yes.

However, there are examples of common investment arrangements whereby an individual is not making specific decisions about each investment of money. Under these circumstances, an individual may perceive a facility within which a succession of separate investments are made, as being merely separate deposits within the one facility.

In such cases, it is not necessary to offer individuals the opportunity to quote their TFN for each new investment under the facility. The TFN may be automatically applied to subsequent investments. It would be impractical for individuals to be asked to decide whether to quote their TFN at the time each new investment of this kind is made - which in some cases can be weekly or even daily, and may not involve more than a signature or telephone call to initiate.

However investment bodies must be able to allow the original quotation to be made in relation to some investments and not others if the individual volunteers such a choice (see FAQ 3 below).

Examples

Examples of such a facility include:

  • common fund investments by Trustees
  • sub-accounts offered by credit unions to members under a single membership/account number
  • repeat investments in a public company which is considered by taxation law to be a single investment
  • term deposits offered by banks.

3 How should organisations collect TFNs in cases where several new investments are actually parts of the one facility?

When inviting an investor to quote their TFN, a clear explanation should be provided to the investor that the TFN will be automatically used for future investments within the terms of the facility, unless the investor indicates at any time that they do not wish to provide their TFN for a particular investment.

Application forms and prospectuses for new facilities should ensure that the following elements are all included, are positioned in reasonable proximity to each other, and are clearly distinct from other information requested:

  • a statement that the collection of TFNs is authorised by the taxation law
  • a statement that the quotation of the TFN is not compulsory but that tax may be taken out of the individual's dividend/interest/distribution if they do not quote their TFN
  • the option for the investor to quote a TFN or exemption for the first time/apply a TFN or exemption already quoted/decline to apply a TFN already quoted
  • if the option to apply a TFN or exemption already quoted is offered, then the default assumption, if no indication is given, must be non-application of the TFN or exemption already quoted
  • if quotation is invited for an investment facility, an explanation must be given of the consequences in terms of automatic application of the TFN to subsequent investment under the facility
  • a statement concerning sources of further information.

If completed forms are intended to be retained and accessed for purposes unrelated to the authorised purpose, then they should be designed to allow prior deletion or removal of the TFN. Access to the TFN must be restricted to staff who require it to carry out their role.

4 What options should be made available to investors when they are asked to quote their TFNs for new, existing and future investments that are not parts of the one facility?

For new and existing investments, it is necessary for investment bodies to take into account investors who choose not to quote their TFN. The following options should be made available to investors:

  • authorising the application of the TFN to all investments held in the investor's name
  • authorising the application of the TFN to specific investments
  • declining to quote the TFN.

For future investments, provision must be made to allow investors the option of declining to quote their TFN. In addition, provision should be made to allow investors to authorise the investment body to use the TFN already on file.

Examples

Where the investment body already holds a TFN in respect of previous investments by the same client, the client's approval may take the form of a "negative option", i.e. a question, which, if not answered, can be taken to imply the application of the TFN to the new investment; for example,

"Please tick the box if you do not wish your TFN, already quoted, to be applied to this investment."

However, if the same application forms are to be used for new and existing clients for whom the investment body does not hold a TFN, the option will necessarily have to be in the positive, along with a space for first-time quotation of the TFN.

More information