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HMRC gives registration guidance for trusts to meet extended March deadline

21/02/2018 News Team

The Chartered Institute of Taxation (CIOT) is urging existing trusts with tax liability to register with the Trust Registration Service (TRS), as the registration deadline of 5 March 2018 soon approaches.

With HMRC expecting around 170,000 existing trusts to register by this date the CIOT say there have been several concerns that have been raised regarding TRS by its members about the deadline extention from 31 January 2018.

According to the CIOT, the Association of Taxation Technicians (ATT) will be updating its briefing note for the following six subjects relating to the members' raised concerns in the coming days. 

Trusts created from a deed of variation: A number of ATT members have asked for clarification about who should be declared as the settlor where a trust has been created by a deed of variation, who are not always the settlor for general law purposes.

Trusts created by will: ATT members have asked for confirmation of who should be reported as the settlor for a trust created in a will and HMRC have confirmed that the deceased should be reported as the settlor.

Corrections to the register: Another enquiry made included the doubt of what would happen if an alteration needed to be made to the information submitted via the TRS. 

Trusts Paying Stamp Duty and Stamp Duty Reserve Tax (SDRT): Under the regulations, the trust must be liable to one of a number of taxes to have a requirement to register. This list includes SDRT but not Stamp Duty.  Members of the ATT have asked whether a trust which pays Stamp Duty would need to register via the TRS. HMRC have confirmed that it is necessary to register trusts which have incurred a liability to SDRT or stamp duty land tax (SDLT); this means that the many pension funds and charitable trusts will be required to register even though they have no liability to income tax, capital gains tax or inheritance tax.

Submitting the report with blank fields: HMRC says that the TRS is slowly being developed and a future version should allow agents and trustees to file reports with certain fields left blank.

Confidentiality: ATT members had expressed concerns about staff using the main Agent Services account log-in for its firm, could see registrations in progress of other trust clients. Members looking to maintain confidentiality can now register on the UK Government website.

The CIOT confirmed that HMRC will impose a penalty on the failure to register existing trusts on TRS and will announce details of the penalties at the end of February 2018.

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