Previously when new trusts were created they only had to be registered with HMRC if they had a UK tax reporting requirement. This was done by the completion of a paper form (form 41-G Trusts) which was submitted to HMRC. This process has worked (effectively in the main) for as long as most of us can remember.
HMRC withdrew this form with effect from April 2017 and announced a new regime called the Trust Registration Service or the Trust Register. This is an online database which will hold various details of not just NEW trusts but also EXISTING trusts which are within the scope of UK tax (be it income tax, capital gains tax, inheritance tax or stamp duty land tax). This is to comply with the EU’s Fourth Money Laundering Directive (therefore if it will still be required in a couple of years remains to be seen). In addition to trusts, ‘complex’ estates must also be registered. There is no requirement for bare trusts to be registered.
The Register has now gone live, although at present only trustees themselves are able to access the service. HMRC have confirmed that it will be opened to agents from October 2017. The Register is intended to hold up-to-date information on all trusts including full details of the assets held, including valuations, details of all the beneficial owners, trustees’ contact details as well as the details of any paid advisers.
The legislation and HMRC guidance on the deadline for registration is confusing although it seems to imply that ALL existing trusts need to be registered by 31 January 2018. This is unwelcome news and will no doubt add to the stress of the hectic Self-Assessment season for most professional advisers.
For new trusts, the usual reporting deadline of 5 October following the end of the tax year in which the trust is established, will continue to be relevant and these will have to be registered via the new online service. However, HMRC are discouraging people from making notifications of new trusts at this time until the service is fully operational and all existing trusts have been registered.
Professional advisers have been aware of the Trust Register since April although it has taken HMRC a long time to go live. As it was meant to be operational in June it remains uncertain if the system will be available for agents from October.
On the one hand the Register will provide a faster and more efficient way of registering new trusts. On the other hand the deadline couldn’t be at a worse time for private client advisers.
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