Chartered Accountants and Professional Business Advisers

Trustees may need to provide information to HMRC’s Trust Register under regulations designed to prevent money laundering and terrorist financing.

Action required

Trustees of all ‘taxable relevant trusts’ will have to provide:

  • a ‘statement of accounts’ for the trust, describing the trust assets (including the address of any property), and
  • information about the identity of settlor(s), trustees and beneficiaries.

HMRC says that in some circumstances trustees will need to register by 5 December, but in the majority of instances the deadline is likely to be 31 January 2018. There are also obligations to keep this information up to date.

Affected trusts

A ‘taxable relevant trust’ is one in which in any year trustees are liable to pay income tax, capital gains tax, inheritance tax, stamp duty land tax, the Scottish land and buildings transaction tax or stamp duty reserve tax in relation to the trust’s income or assets. It isn’t clear when the status of a trust is determined, except that it is on or after 26 June 2017, when the regulations first applied. HMRC seems to believe that ‘liable to pay’ means when the relevant liability accrues, for example the tax year in which taxable income arises, but it might be when the income tax is payable.

Information on beneficiaries

HMRC seems to require details of all named discretionary beneficiaries and any others who actually receive benefits. The regulations say that information on individual discretionary beneficiaries is not required if the

class is still open, as for example in the case of a discretionary trust where the beneficiaries are defined as the issue of the settlor, and any spouse of any of the issue, born before the end of the trust period. Otherwise, the trustees would have to advise a change to the register for every birth, death, marriage and divorce of a member of the class of beneficiaries.

However, the regulations do permit HMRC to require trustees to provide information about what is in a letter of wishes. A similar problem would apply to most flat management companies, where lessees’ service charges and contributions to a sinking fund are held in trust.

Further information required

The regulations require advice of the value of trust assets as at the date of the current statement of account. HMRC, however, asks for the value of trust property when settled. Where the trust assets include shares, etc. of companies, HMRC is also asking for the companies’ UTRs, which the regulations do not mention.

Estates Register?

HMRC initially said it was introducing a separate Estates Register, saying that details of ‘complex estates’ should be given by 5 October of the tax year after the estate is ‘set up’. The details sought are the name of the deceased, those of the personal representatives, ‘the tax years the estate needs to declare liability to income tax or capital gains tax for’ and ‘period end date if the administration period has ended’. Now it proposes including estates in the ‘Trust Register’, to be known as the Trust Registration Service – the TRS.

Trustees’ record-keeping obligations

The regulations require trustees of all ‘relevant trusts’ to maintain the information that has to be filed with HMRC by taxable relevant trusts. A ‘relevant trust’ is a UK express trust, or non-UK trust that receives income from a UK source or has assets in the UK, including a bare trust.