While this article outlines the changes to help you plan, individuals’ arrangements vary. We do recommend people seek professional advice to ensure their specific circumstances comply with any fresh obligations under the new arrangements. Please speak with your usual Shipleys contact or one of our trusts specialists shown on this page.
What the changes will mean
From 1st September 2022, more trusts will have to be declared to HMRC irrespective of whether tax is payable on them. These include:
- all UK ‘Express Trusts’ (unless specifically excluded) and
- any ‘Non-UK Express Trusts’ that have a tax liability, or those trusts that directly acquire land/property in the UK, or have at least one trustee resident in the UK and enter a ‘business relationship’ within the UK (ie appoint a lawyer or tax advisor).
Previously only express trusts with a UK tax liability required registration.
Are any trusts excluded from registering?
If any of the following non-express trust types do not have a tax liability, we understand that (currently) they are exempt from the new reporting arrangements:
- Trusts used to hold money or assets of a UK registered pension scheme (such as an occupational pension)
- Life/Retirement Policies (where the providing policy only pays out on death, terminal illness, permanent disability or for healthcare costs of the person assured)
- Charitable Trusts
- ‘Pilot Trusts’ from pre-October 2020, which contain less than £100
- Co-Ownership Trusts which hold shares of property/other assets and which are jointly owned by 2 or more ‘tenants in common’
- Will Trusts, providing that they only hold estate assets for up to 2 years after the death
- Personal Injury Trusts
- ‘Financial’ & ‘Commercial’ Trusts
- Trusts held for bereaved children under 18 or ‘18-25’ adults
The full list of trusts can be found in HMRC’s Trust Registration Service Manual. If in doubt, please ask one of our team of specialists shown on this page.
Timetable and deadlines
From 1st September 2022, HMRC must be notified of changes to the trust details/ or circumstances within 90 days of the change.
If the trust has incurred a UK tax liability, trustees should still comply with existing timescales and get appropriate tax advice.
Taxable trusts created on/after 6 April 2021 should be registered with HMRC either within 90 days of the trust becoming liable for tax, or by the 1st September 2022 (whichever is later).
So, in summary:
- Non-taxable trusts in existence on/after 6th October 2020 need to register by 1st September 2022.
- Non-taxable trusts created after 1st September 2022 need to register within 90 days of creation.
How to register and a helping hand
Trustees can register a trust themselves using the links here – https://www.gov.uk/guidance/register-a-trust-as-a-trustee .
As well as offering advice on whether a trust requires registration we can also, for a small cost, register trusts on your behalf and guide you in claiming the trusts we have registered with HMRC.
With the changes coming in soon, we encourage all our clients and contacts with trusts affected to make the necessary preparations. Please do reach out to our team if you have any questions or need any help. Speak with your Shipleys contact or one of our trusts specialists shown on this page.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary.
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