Deadlines eased for trust registrations

Frustration
iStock_peoplesimages
Share this content
Tags

Following considerable pressure from the professional bodies HMRC has agreed to further extend the deadline for registering all trusts, and to simplify the data required.

Debacle

I discussed the issues with the trust registration service (TRS) on 17 November 2017, and since then AccountingWEB members have been expressing their frustrations at the system on Any Answers.

Deadlines

There are two filing deadlines:

  • New trusts which need a UTR number in order to report an income tax or CGT liability for the first time in 2016/17 need to be registered by 5 January 2018. This is an extension for the first year of the TRS only from 5 October 2017.
  • Existing trusts need to be registered through the TRS by 5 March 2018. This is an informal extension of the deadline from 31 January 2018. The HMRC news on gov.uk still shows a deadline of 31 January 2018 for existing trusts, but HMRC have confirmed to the ATT and CIOT that penalties will not be imposed for trusts registered by 5 March 2018. This applies for trusts already registered for self- assessment and those which do not require to be registered for SA as there is no reportable tax lability.

Process

Tax agents should now be able to access the TRS directly and set up an Agent Services account (ASA) at the same time. You should not have to wait for HMRC to approve your application by email. Also the 2-step verification process is not mandatory to operate the ASA.

The TRS process has been tweaked so you can save the submission of data to the TRS after sending. This will provide you with proof of the data submitted through the TRS. You can also use dummy information where certain data could not be ascertained, such as the NI number of a deceased settlor.

Data

Where a beneficiary is named, the trustee, or you as the tax agent, will still need to provide the relevant details. However, details of named beneficiaries whose benefit is contingent on an event occurring, do not need to be reported until the contingent event has occurred.

Where a beneficiary is not named, as they are part of a class of persons, a trustee only has to identify individuals when they receive a financial or non-financial benefit from the trust after 26 June 2017. The class of beneficiaries should be reported as described in the trust document.

HMRC has updated its draft guidance on the TRS which includes more examples. The ATT has also produced some excellent and comprehensive guidance on the TRS which is freely available for anyone to download, you don’t have to be an ATT member to access that guidance.

Penalties

There will be a penalty regime for late or incorrect registrations of trusts through the TRS, but HMRC has not indicated what form those penalties may take.

In a statement to the professional bodies HMRC said:

“The Trust Registration Service (TRS) is an important tool for the UK government in meeting its obligations to tackle money laundering and it is important that the register is complete, but it is also important that we enable and support trustees and agents to comply with these new requirements, rather than simply enforce non-compliance”.

About Rebecca Cave

Consulting tax editor for Accountingweb.co.uk. I also co-author several annual tax books for Bloomsbury Professional and write newsletters for other publishers.

Replies

Please login or register to join the discussion.

avatar
18th Dec 2017 13:04

As I understand this the deadline has not been moved. I think it is just that penalties will not be charged for submissions between 31/1 and 5/3, but late submissions would still be non-compliant - something some clients may not want to do.
The case for a statutory change in the deadline for this year may still remain.

Thanks (0)
avatar
By Chris7
18th Dec 2017 13:13

I'm confused.... in the article, Rebecca says
This applies for trusts already registered for self- assessment AND THOSE WHICH DO NOT REQUIRE TO BE REGISTERED FOR SA AS THERE IS NO REPORTABLE TAX LIABILITY"
That seems to suggest that ALL Trusts are going to require registration even where there is no liability to tax, but the HMRC guidance notes read (on page 10)

C. WHO NEEDS TO REGISTER
Who needs to register?
When the trustees of a UK express trust incur a liability to pay any of the relevant UK taxes in relation to the trust income or assets;

That implies that a UK Trust does not need to register until it becomes liable to pay tax

Can anyone clarify this please?

Thanks (0)
avatar
to Chris7
18th Dec 2017 14:13

A trust need not register unless/ until it has to pay tax - but this includes all of the mainstream taxes (IT, CGT, IHT, SDLT, LBTT and Stamp duty reserve tax - see para 5 in the ATT guidance). So you have a trust that has to register because it owes IHT but does not have a UTR because it does not have a SA obligation.

Thanks (1)
avatar
By Chris7
to Tomazaan
18th Dec 2017 14:23

I see - so basically as soon as ANY tax liability is triggered is the time to register. Like most Tax law, clear as mud ;-)
Thanks!

Thanks (0)
avatar
18th Dec 2017 13:19

Hi,
I am pondering the obligations in relation to unincorporated "members" sports clubs. They pay corp. tax on non-mutual income. I presume there is no obligation to register such trusts until such time as the club has say a CGT obligation. Am I correct?

Thanks (0)
avatar
18th Dec 2017 14:09

Good afternoon

To the enquirer who asked about members clubs and suchlike. ( lots of us have flat management companies too), these bodies are deemed to hold members unexpended contributions " on trust". They do not pay corporation tax on the interest, they pay income tax at Trust rates. So.... if they are already doing this - or presumably- even if they should be but don't- they are required to register just like active Discretionary, Will Trusts etc must now.
I find the idea of a penalty for not registering a Trust which is already fulfilling its tax duties, has a UTR etc, objectionable in the extreme. Why HMRC can't import these bodies into their new fangled Money Laundering proof Register themselves is beyond me.

Thanks (4)
avatar
By Chris7
to KABcraigmore
18th Dec 2017 14:16

...

Thanks (0)
avatar
18th Dec 2017 14:32

I am personally a trustee of 4 family trusts. I am not aware of having received any correspondence for any of them telling me about the need to reregister. How can HMRC enforce this when many trustees will be completely oblivious to the need to reregister?

Thanks (0)
avatar
18th Dec 2017 14:45

Can anyone help please? Is it necessary to register a trust which was set up and came into effect on the death of the first spouse in 2014, a"nil rate band" . The potential beneficiaries are the surviving spouse and the adult children.

Thanks (0)
avatar
18th Dec 2017 15:23

This is still unsatisfactory, especially at the busiest time of the year. The obvious approach would be to file the necessary information with the Trust SA return for April 2018, i.e. By 31.1.19. By this time HMRC might have worked out how to add Trust Register to existing agents' online services to speed up the process. Why must they always make life so awkward for us?

Thanks (0)
avatar
By TessaW
19th Dec 2017 12:37

I started a registration as an agent & set up my agent services account. All seemd fine but I needed more info from the client. Tried to go back into my agent services account through the usual HMRC log on & although I could log on, there were no services there at all. Then went via the trusts section of the gov website & there was my part-completed registration - so can we only access our agent services account from there? Very confusing. Tried to look at it again today & get a message "The service is unavailable". I think I will give up until February.

Thanks (0)
avatar
19th Dec 2017 14:52

Dear Rebecca

What is the source of this assertion "You can also use dummy information where certain data could not be ascertained, such as the NI number of a deceased settlor"?

I ask because the word 'dummy' does not appear in HMRC's guidance of 22/11/17 and as not everyone has a NINO (for example Britons under 16 and most non-Britons) it seem unlikely that this field must have data entered. What is the difference between dummy data and fraud? How does one indicate that it is the former and thus avoid being accused of the latter? Is it compliant with the PCRT to enter dummy data'?

Thanks (0)
to Mr Trellis of N Wales
20th Dec 2017 08:14

See sections 27 and 28 of the ATT guidance on TRS:
https://www.att.org.uk/sites/default/files/The%20Trust%20Registration%20...

Thanks (2)
avatar
21st Dec 2017 17:06

Registering as the trustee of a family trust I encountered the same problems as TessaW. HMRC should test its systems more thoroughly before inflicting them on us. HMRC could benefit from a reminder about just who is serving who here.

Thanks (2)
avatar
05th Jan 2018 17:43

Found out from a client yesterday that I needed to set up a new Trust by today! Didn't even have an ASA set up but managed to do that relatively easily (without transferring data over) and started registration this morning. Needed more info, so saved and logged out but bookmarked the page on my desktop, so I could return to it more easily. Succeeded in finishing registration this afternoon! Hurrah! UTR promised within 15 days (!)
Not so nervous about doing the others now.
p.s. I confess I did leave off one trustee (out of 5) for whom I had no NI number. Presume we can add later if necessary?

Thanks (0)