Trust Registration Service
Background
As part of increased transparency obligations new EU Money Laundering regulations require trustees to maintain specific data regarding beneficial owners – which will in general be settlors, trustees and beneficiaries of a trust. This information is to be maintained via the Trust Registration Service (‘TRS’).
For most trustees who are required to report this information, the deadline for submission of the data is 31 January 2018.
Detail
Who is required to use the TRS?
All trusts which have either a UK income source or UK assets on which the trustees are liable for one or more of the following taxes:
- Income Tax
- Capital Gains Tax (CGT)
- Inheritance Tax (IHT)
- Stamp Duty Land Tax (SDLT)
- Land and Buildings Transaction Tax (LBTT)
- Stamp Duty Reserve Tax
What information is required?
For those trusts who required to provide data to the TRS, the type of information trustees will need to start gathering includes details of the trust’s beneficial owners and assets.
Beneficial owners is defined as the settlor(s), trustees and beneficiaries, but also including any protectors (unlikely unless there is an offshore aspect to the trust) and any other person who has control or influence over the trust. Where the beneficiaries are unknown, for example future unborn children, then they are still required to be disclosed – classed using the wording of the trust deed.
Assets of the trust will also be expected to be disclosed by H M Revenue & Customs (‘HMRC’). Details of the assets originally introduced to the trust will be required, together with their value at the start of the trust, the address of any properties and details of shareholdings.
HMRC are aware that some of this historic information may be difficult to obtain, and expect trustees to do the best they can.
Therefore, most trusts that are already in the self-assessment system will be subject to the TRS reporting requirements, and it will be important for the trustees of those who are not to be aware of registration being required in the future should a reportable tax event occur, such as a liability to IHT.
Any new trusts or trusts liable to self-assessment for the first time in 2016/17 will need to register by 5 January 2018, whilst all other trusts required to register must do so by 31 January 2018.
Compliance with the requirements of TRS is likely to be a substantial exercise and therefore it will be important for trustees to be aware of these additional responsibilities, as well as ensuring changes to beneficiaries and family situations are communicated to professional advisers as promptly as possible.
If you require more information regarding any of the above, or assistance with trust matters please contact our Tax Director, Jenny Marks.
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