As part of HMRC's wider digital strategy, it has removed the ability for trustees to register and update trust records with HMRC in a paper format, such as via the trust tax return. To replace the paper system, a new service known as the Trust Registration Service has been launched. This online system requires trustees to report the trust details to HMRC and update the register annually. The types of trusts affected include: Employee Ownership, Discretionary, Interest in Possession and Charitable. There are specific exclusions for bare trusts and for those trusts which have been wound up before the requirement came into force.
The new registration requirements, which result from the UK’s adoption of the EU Fourth Money Laundering Directive, are part of a wider push for increased transparency over the beneficial ownership of entities, to prevent them being used to obscure ownership or money flows. The new Trusts Register will complement the existing register of People with Significant Control (the PSC Register) which looks at the owners of corporate bodies.
HMRC will maintain the register of the beneficial owners of all those express trusts with UK tax consequences. Unlike the PSC Register, the Trusts Register will not be publicly accessible, although information will be available to UK law enforcement authorities and may be exchanged with other EEA authorities. The EU is currently looking at proposals to make the register publicly available, but no final agreement has been reached.
Please get in touch with us if you would like any help with trusts that you currently manage, if you need help using the new service or would like us to take over the registration for you as agents on behalf of the trust.
Key Points to note
- All trusts with income or capital gains tax liabilities need to be registered via this service going forwards, with the deadline for registering new trusts with liabilities for 2016/17 currently extended to January 5th 2018.
- Trusts that have already been advised to HMRC using a paper form 41G & which are already registered for Self Assessment will need to register online with the new service by January 31st 2018.
What details will you need?
- Details of the assets owned at the point that the trust was first notified to HMRC, broken down into the following categories: Money, Land and Property, Shares, Business Interests, Partnership Interests and Other. The trust will need to list each asset in each class, and identify the appropriate value.
- The identity of the settlor, trustees, beneficiaries and other people with influence or involvement in the trust (including names, dates of birth, NI numbers or passport numbers for non-UK residents).
- Details of the deceased person if the trust was established by will or intestacy or the protector if one has been appointed.