Registering a discounted gift trust with HMRC

Do I need to file a trust tax return for a discounted gift trust if the withdrawal is within 5%

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I have a client with a Discounted Gift Discredtionary Trust which I need to register with HMRC. I have the trust deed etc for all the information I need.

One thing which I was not sure about is whether I need to file an annual tax return for these discounted gift trusts? I don't think I do, but would appreciate some clarity on my understanding. It's a discretionary trust and the settlor has never withdrawn more than 5% of the original investment each year so not creating a tax liability.


Replies (3)

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By cohen
02nd May 2024 16:58

No need to file a return, unless there is anything taxable to declare, or if HMRC issue a return.

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By richard thomas
02nd May 2024 22:16

I would put it the other way round from cohen, but to the same effect.

No “need” to file return if no notice to file issued.

No need to notify chargeability if no tax liability. I’m assuming that the 5% is a reference to the rules for part surrenders of the life policies held on trust.

And that the reference to registering with HMRC is a reference to anti-money laundering rules, not tax ones.

It might help if any future questions explained the issues in a tad more detail.

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Replying to richard thomas:
By Tax Dragon
02nd May 2024 22:29

I think the OP may have been wondering whether to register as taxable or non-taxable. But that wasn't what was asked, so my thought is only a guess.

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