Following new legislation introduced in June 2017, it is necessary for most trusts to retain a written record of their beneficial owners. These include the settlor, trustees, beneficiaries and any person who can control the trust.
Any trust liable to the following taxes:
- Income Tax
- Capital Gains Tax
- Stamp Duty Land Tax
- Land and Buildings Transaction Tax (for Scotland)
- Inheritance Tax
- Stamp Duty Reserve Tax
is required to report details of their beneficial owners to HMRC via the Trusts Registration Service (TRS). HMRC will retain that data on a Trust Register, which will be accessible by various law enforcement agencies.
The ATT technical team have prepared a detailed Briefing Note on the practicalities of the TRS here. However the main concern for agents at present is simply getting access to the service. The following is the latest information we have as at 10 October:
Access for agents
In the September Trust and Estates newsletter it was indicated that agents should have access to the TRS by early October. As at 10 October, we do not know when agents will get access to the service.
Access will be online via the new Agent Services portal which has been developed as part of Making Tax Digital. This means that agents will need to get their Agent Services account set up before they can access the TRS. Agents cannot yet set up an Agent Services account and again, access dates for Agent Services are not currently known but are expected shortly.
Deadlines for trusts already in self-assessment
For trusts already in self-assessment, the deadline for these trusts to register with HMRC via the TRS is 31 January 2018. This gives agents, especially those specialising in trust work, a limited time to comply with the new rules. The filing deadline also coincides with the 2016-17 self-assessment deadline. The ATT have raised concerns about the timescales involved with HMRC.
Deadlines for self-assessment
The usual deadline to register a trust or complex estate1 coming into self-assessment for the first time in 2016/17 is 5 October 2017. Since agents do not have access to the TRS, HMRC have extended the registration deadline by two months to 5 December 2017. All trusts, whether represented by an agent or not, can benefit from this extension. The ATT have expressed concerns that although the extended deadline is welcome, as access is further delayed, agents will not get the full benefit of the two months.
Penalties for late registration
The new legislation includes provision for penalties for late registration. HMRC have said they expect to release details of the penalty regime later this year. The ATT and other professional bodies have asked for a soft landing in this first year, given the short timescale agents have to comply.
HMRC released guidance on the 9 October to professional bodies which can be found here.
There have also been two Talking Points sessions in August and September, and a third is planned in November. The link to both webinars can be found here. The help sheet provided in September’s session can be found here.
- A complex estate is one where:
The estate is valued at over £2.5m,
The tax due for whole period administration will exceed £10,000
or sale of assets over £500,000 (£250,000 for deaths prior to April 2016)