HMRC Trusts Register

It has been a requirement for some time that if a trust is liable to pay any income tax or capital gains tax, then the trust must be registered on the HMRC Trusts Register.

The type and number of trusts that should now be registered was recently increased. Therefore trustees of trusts that have not registered should check whether their trust ought now to be registered even if previously it did not.

HMRC have also now issued guidelines outlining the requirements for trustees of trusts that are on the register to update those details. The website dealing with the registrations has been updated to allow those changes and updates to be made. 

What is required on the HMRC Trusts Register?

A trustee must use the online service if information about the trust provided to HMRC in the initial registration has changed and the trust is liable to tax. The changes which might trigger the need to update include changes to the following:

  • The main or lead trustee (the one to whom HMRC send correspondence and tax returns).
  • The details of any of the other trustees (to include changes of address and indeed changes in the trustees themselves on the retirement or appointment of trustees).
  • The details of the beneficiaries such as changes of address.
  • However if the trust is not liable to tax there is no need to report those changes until the trust becomes liable to tax again. 

If the trust is liable to pay tax in a particular tax year then the trustees must declare that the details of the persons associated with the trust are still accurate and up to date. This needs to be done whether the Register has been updated with any changes or not. 

In addition, where the trust is liable to make any income tax or capital gains tax payment, the trust’s self assessment return for that year must include confirmation that the details have been updated on the Register or that no changes are required.

Deadlines

Any changes occurring in the period to 6 April 2020 in respect of a trust that was liable for tax during any of the three tax years leading up 6 April 2020 must be updated on the Register by 31 January 2021. 

If a change were to occur during the period from 6 April 2020 to 5 April 2021 then the register must be updated on or before 3 January 2022. 

In other words, the deadlines coincide with the deadline for the submission of the tax return for the year in which the amendment occurred.

Trusts that have closed or terminated

HMRC have also reminded trustees that where a trust ends or terminates that again the register will need to be updated to confirm that this has occurred.

It is possible that the trust may need to submit a final tax return for the period to the date of its termination.

What next?

It is important therefore that trustees are able and remember to update the details of their trust registration on an annual basis. This is perhaps best done when completing the trust tax return. 

If trustees need help or assistance in deciphering whether or not their trust needs to be registered or whether the registration details need to be updated please contact the private client team.