A finger is pressing a blue button on a keyboard which reads 'register now'.

Urgent 31 December 2025 registration deadline for some trusts and companies

15 December, 2025

First published 15 December 2025. Updated 16 December for comments from HMRC on penalties. 

 

Earlier this year the Government made changes to the Automatic Exchange of Information (AEOI) regulations, which will affect some trusts and other entities with significant investment income.

Any trust, company or partnership which is considered a reporting Financial Institution (FI) under the Common Reporting Standard (CRS) or Foreign Account Tax Compliance Act (FATCA) must register with HMRC by 31 December 2025, even if they are not required to actually report under these regimes. Trustee-Documented Trusts (discussed below) are also required to register with HMRC by the same deadline.

Awareness of the implications of these new measures has been low, and timescales are very tight. However, the ATT understands that HMRC is not able to extend the deadline due to the international nature of the obligations. Given potential penalties (see below), affected entities need to make best efforts to register in time.

Background

As part of transparency measures, and to tackle tax evasion, for some years the UK has required “financial institutions” - typically understood by the general public as banks and investment providers - to collect information on non-residents who hold accounts with them and report this to HMRC. HMRC has then exchanged this information with other countries- the US (under FATCA) and other OECD countries (under CRS).

However it is important to understand that the term “financial institution” is very broadly defined and it is possible for family trusts and other entities, including partnerships and companies, to meet the definition of Financial Institution (FI) under FATCA and/or CRS. This means that these rules capture a much broader range of entities than might be expected.

What is a Financial Institution in the context of a trust or other entity?

For the purposes of AEOI, trusts (and other entities such as companies or partnerships) need to establish whether or not they meet the criteria to be considered an FI.

The tests are complex, but the main test relevant to most trusts is the ‘investment entity' test. This test asks whether 50% or more of the trust’s income comes from investments and the trust has a discretionary fund manager. If the answer is yes to both, then the trust is generally a reporting Financial Institution (FI) and needs to register with HMRC by 31 December 2025.

A trust with investment income could alternatively be a Trustee-Documented Trust. Again this requires more than 50% of the trust’s income to come from investments, but here one of the trustees is a FI itself, typically a corporate trustee. Where the corporate trustee has agreed to take on reporting responsibilities for the trust, it is not considered a reporting FIs under FATCA or CRS. However these trusts are also required to register with HMRC by 31 December 2025.

What has changed?

Prior to the new rules, only FIs which needed to make an AEOI return needed to register with HMRC for AEOI. In the case of a UK trust which qualified as an FI, this would typically be where one or more of the settlors, trustees or beneficiaries was non-resident. 

Individual trustee-documented trusts did not need to register even if they had a report to make, as their corporate trustee would register to make the report for them. 

Now all reporting FIs and Trustee-Documented trusts need to register directly – even if they have nothing to report.

The main impact will be on UK trusts classified as FIs where all relevant parties (settlor, protector, trustees and beneficiaries) are UK individuals. These trusts are likely to be registered for FATCA with the IRS in the US – and should be registered on the Trust Registration Service - but are unlikely to have previously needed to be registered for AEOI. In order to ensure that HMRC now has full oversight of the population of FIs, a third registration (AEOI) is needed with HMRC as well.

The registration is a one-off requirement and there is no need to make nil-returns once registered.

Trustees have four actions to complete:

  1. Confirm if they meet the definition of a Financial Institution.
  2. Register with HMRC for AEOI by 31 December 2025 (or 31 January following the end of the calendar year they first meet the definition)
  3. Obtain self-certification from settlor, trustees and beneficiaries to confirm their residence details.
  4. Notify all parties that their data will be reported to HMRC and may be exchanged internationally.

Deadlines

A trust or other financial institution must now register with HMRC for AEOI purposes by the later of

  • 31 December 2025 or
  • 31 January following the calendar year in which the entity become a Reporting Financial Institution or Trustee-Documented Trust.

Penalties

HMRC’s manuals set out the following penalties for failure to register:

  • £1,000 for failure to comply with notification requirements
  • Daily penalties of up to £300 if, after notice of the penalty has been issued the failure continues.

HMRC have shared the following with us: "If members are genuinely having difficulties meeting the deadline, and consider that the circumstances constitute a reasonable excuse, that they should contact [email protected] to explain why." 

Practical issues

Registration is through HMRC’s AEOI portal.

Agents should be aware that once a registration has been filed, the system will lock them out for 24 hours after each submission to allow for processing – which prevents further filings. One approach to get around this is to bulk load up to 250 trusts in one go. Although note the same lock-out will apply after each bulk-submission.

Further guidance

More details on the requirements can be found in HMRC’s International Exchange of Information Manual and in some recently published STEP guidance.