The Trusts Register will provide a single point of access for trustees and their agents to register and update their records online, replacing the current paper 41G(Trust) form and the ad hoc process for trustees to notify changes in their circumstances.
What trusts are affected?
All express trusts with a UK tax liability will need to be registered. This also includes offshore trusts which have UK tax liabilities in respect of assets they hold directly.
Is registration mandatory?
Yes, providing that the UK trustees (rather than the settlor, beneficiary or anyone else) have a liability in principle for the following taxes from 6 April 2017:
- Income tax
- Inheritance tax
- Capital gains tax
- Stamp duty reserve tax
- Stamp duty land tax*
- Land and buildings transaction tax (Scotland)
*Please note SDLT in Wales is being replaced in Wales by a new Land Transaction Tax (LTT) on 1 April 2018 and [some of] HMRC’s functions will be devolved to the Welsh Revenue Authority. At the time of writing it is not known whether LTT Tax will be added to the list of taxes.
When do trustees need to register?
Trustees must register in 2018 if:
- they have paid any of these taxes (above) in the past;
- they do so for the first time in the UK tax year, ending on 5 April 2017
Once registered, trustees will need to update the register annually, unless no changes or tax liabilities have occurred since registration.
Trustees must ensure and confirm the Trust Register is accurate and up to date, guaranteeing their obligations under the 4th Money Laundering Directive are complied with. This includes those trusts that have already registered with HMRC using the 41G(Trust) form.
When are the deadlines for registration?
The registration deadlines for trusts with UK tax liabilities in 2016-17 are set out below:
- If the trust is registered for self-assessment with HMRC: 5 March 2018
- All other trusts should already have been registered by 5 January 2018.
If you are not required to register a trust by the above deadlines, you will need to do so later if the trust incurs a liability for the above-mentioned UK taxes for the first time.
In the meantime, the trustees of an express trust must:
- Keep records of certain information about the trust’s settlors, beneficiaries, anyone advising the trustees or who has ‘control’ over the trust
- Provide these details on request from HMRC or by anyone dealing with the trustees.
Legal responsibility to register the trust, update it as required and keep the required internal records rests with the trustees.
Are estates affected by the new Online Trusts Register?
Only if the estate if regarded as a ‘complex’ estate.
HMRC requires an estate to obtain the Unique Tax Registration (UTR) number via an online portal in order to file self-assessment returns with the Cardiff district, if:
- The probate value exceeds £2.5 million
- The executors expect to pay more than £10,000 overall in administration period tax
- The executors sell assets in any tax year worth more than:
- £250,000 (deaths up to 5 April 2016), or
- £500,000 (death after that date)
For further information, please see below the following links:
The Trust Registration Service – further updates (for details of latest changes as of 15 February 2018.)
The Law Society would like to thank Geoff May, Private Client Partner at Child & Child, for his input and contribution to the Q&As.
Geoff is a member of the Law Society’s Capital Taxes Sub-committee.