Introduction of the Trusts Registration Service (TRS)
As part of HMRC’s digital strategy and to comply with The Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) Regulations 2017, HMRC have recently introduced the Trusts Registration Service. This allows trustees to register their trust online and provide information on the beneficial owners of the trust. The new service launched in early July for trustees and replaces the 41G (Trust) paper form, which was withdrawn at the end of April.
All new and existing trusts (including some pension scheme trusts) with a tax consequence in 2016/17 need to be registered. A tax consequence is a liability to:
Pension scheme trusts will generally only need to register if they have been or will be liable to the relevant UK tax liabilities listed above.
Deadlines for registering your details
Under the existing self-assessment rules, the trustees (or their agents) must register details of a trust with HMRC by 5 October of the year after a liability to Income Tax or Capital Gains Tax first arises. The registration process, which will need completing via the TRS website, includes providing information about the beneficiaries of the trust.
In subsequent years, or where the trust is already registered for self-assessment, the trustees (or their agent) of either a UK or non-UK trust that incurs a UK tax liability are required to provide beneficial ownership information about the trust, using the TRS, by 31 January following the end of the tax year.
HMRC have advised that agents will be able to register on behalf of trustees from October 2017 and agents and lead trustees can enter updates for changes of circumstances from early 2018. HMRC have also confirmed that in this first year of TRS there will be no penalty imposed where registration is completed by 5 January 2018 for trusts whose first tax assessment year is 2016/17.
From 17 November 2017, the method of registering a trust has been simplified: an agent can now access TRS directly rather than email HMRC for approval to access.
Self Assessment forms
A Self Assessment Trust and Estate Tax Return (SA900) must still be submitted after the end of each tax year, reporting any income and gains. A TRS update is required each year in parallel with income tax returns. However, an update is also required when any tax charge arises, for example, IHT principal charges or SDLT.