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Is your Trust registered with HMRC?

09 Jan 2018

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulation 2017 came into force on 26 June 2017 as part of a global bid to increase transparency. The Regulation imposes new obligations on Trustees to maintain accurate and up-to-date information about the “beneficial owners” of “relevant Trusts”. To provide a platform for these new reporting requirements, HMRC have introduced a Trust Registration Service. If you are responsible for the administration of a Trust you should therefore act on these new rules and ensure that the Trust which you are responsible for is compliant.

What is a relevant Trust?

A relevant Trust is any Trust which is liable to pay UK tax in the tax year. This means that UK Trusts which have incurred a liability to Income Tax, Capital Gains Tax, Inheritance Tax or Stamp Duty in the tax year now need to register with HMRC. Non-UK Trusts which have received income from a UK source or have UK assets may also need to register.

What information is needed from beneficial owners?

A Trusts’ beneficial owners include the person who originally set up the Trust (known as the Settlor), the Trustees and the named beneficiaries together with, individuals who have influence over how the Trustees make their decisions (known as the Protector). The Trustees will therefore be required to report the full names, dates of birth, National Insurance numbers and (for non UK residents) passport numbers for all of these individuals.

Further information to be reported to HMRC includes details of the assets settled into Trust (being the assets originally put into the Trust when it was formed) – although for existing Trusts where this information has previously been provided to HMRC full details of the assets settled into Trust may not be required.

How do I register a Trust?

As part of HMRC’s digital strategy, it has removed the ability for Trustees to register Trusts using the paper form 41G. As an alternative, HMRC now provide an online Trust Registration Service (“TRS”) in order to provide Trustees (and personal representatives of complex estates) with a single online route to obtaining their Unique Taxpayer Reference (“UTR”). Trustees, or their agents, will therefore need to register the information above for new Trusts using the TRS in order to obtain a UTR.

Existing Trusts which have already received a UTR will also need to register with the online service should a tax liability arise in any given tax year.

Once registered, Trustees have a duty to report annually to HMRC any changes which have arisen or confirm that no details have changed.

Deadlines

Trusts which have incurred a liability to Income Tax, Capital Gains Tax, Inheritance Tax or Stamp Duty for the first time in the tax year 2016 to 2017 should have completed their registration by 5 January 2018. If you have missed this deadline penalties may be applied. The deadline for registering existing Trusts onto the TRS is 31 January 2018. If you miss this deadline penalties may be applied if the Trust is not registered by 5 March 2018.

If you would like advice about Trust Compliance or the Trust Registration Service please contact Hay & Kilner’s Private Client team for further information.

For further information, please contact Alice Clewes on 0191 232 8345 / Email: Alice.Clewes@hay-kilner.co.uk