The Association of Taxation Technicians (ATT) is reminding trustees that they have only four weeks left to comply with new legislation that requires them to register their trust with HMRC.
Anti-money laundering regulations introduced in June 2017 require trusts liable to certain taxes1 to report details of their key individuals to HMRC. That includes individuals involved in the creation and running of the trust, as well as those who can benefit from trust assets.2 Trustees must register their trusts online using the new Trust Registration Service (TRS). The resulting Trust Register will not be accessible to the public, but will be accessible to a number of law enforcement agencies as part of a global drive to enhance transparency.
Yvette Nunn, Co-chair of ATT’s Technical Steering Group, said:
“The actual registration deadline for the majority of trusts which must comply with these new rules was 31 January 2018.3 Following pressure from the ATT and other professional bodies, HMRC confirmed late last year that penalties will not be applied where registration is completed on or before 5 March 2018.4 This extension recognises the technical difficulties and delays that agents have experienced when registering trusts – indeed some agents are still unable to access the TRS.5
“We are particularly concerned that trustees who have not appointed an agent and who handle the trust’s affairs themselves may not be aware of the requirement to register with the TRS. There is limited guidance on GOV.UK. Trustees need to be aware that they can find more detailed guidance from HMRC in the form of a set of FAQs hosted on the websites of professional bodies such as the ATT.6
“It is estimated that around 20 per cent of trusts do not have an agent to assist with their tax affairs. The only clue that these trustees will have had that they need to comply with these new regulations was a question on the 2016-17 trust tax return. The question referred to information supplied – i.e. in the past tense - and then asked trustees if they had updated their details on the Trust Register. There was nothing to indicate that this was a new requirement, nor any guidance as to how trustees should access the Register online to update it. This is presumably because the 2016-17 trust tax return was designed and produced before the TRS was even in existence.
“Full details of how the penalty regime will apply where trustees fail to comply with the TRS requirements have yet to be published. We are asking HMRC to be lenient in this first year as trustees get to grips with the new rules and to reflect the issues which HMRC have had with the TRS service to date.”
Notes for editors
- The relevant taxes are income tax, capital gains tax, stamp duty land tax, land and buildings transaction tax (Scotland), inheritance tax and stamp duty reserve tax.
- The individuals who need to be reported on the register are termed the trust’s beneficial owners. This term includes the settlor(s) who created the trust, the trustees who manage it, beneficiaries of the trust and any person who can control the trust.
- An earlier deadline of 5 January 2018 applied to any trusts who first came into self-assessment in 2016/17. This will include trusts created between 6 April 2016 and 5 April 2017, or existing trusts which acquired an income or disposed of an asset for the first time in that period.
- HMRC’s announcement of the ‘soft landing’ for penalties is reported here. It follows a number of representations from ATT including this joint letter with the Chartered Institute of Tax (CIOT) here.
- In an update of 4 January 2018, HMRC said “We recognise and appreciate the frustration experienced by some within the trust and agent community and apologise for the delay in providing agents with access to the TRS and the other technical difficulties encountered.” The full statement to the ATT and CIOT from HMRC can be found here.
- HMRC’s GOV.UK guidance on the need for trustees to register with the TRS can be found here. The level of detail has only been updated in recent months. More detailed guidance has only been provided to professional bodies – see, for example, the ATT website here.
- The Trust and Estate Return for 2016-17 (form SA900) can be found here. The reference to the Trust Register can be found at question 20 on page 11.