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Reminder to update the trust register

11 December 2020: Many trusts need to update details on the trust register or make a ‘no change’ declaration by 31 January 2021. Functionality is now available and HMRC has clarified its position on penalties, trust returns and closing trusts.

ICAEW’s Tax Faculty is urging agents and trustees to ensure details are correct on the Trust Registration Service (TRS). The functionality to update the online register is now available, enabling trusts to meet the requirement to update the details or confirm that they have not changed.

In many cases the deadline for doing so is 31 January 2021. Further details can be found in TAXguide 14/20, which is available to all ICAEW members.

HMRC has also provided further clarification on the completion of question 20.1 on the trust and estate return (SA900). In a statement to ICAEW and other professional bodies, HMRC confirmed that trustees and agents should ensure that box 20.1 on the SA900 return “reflects whether the register has been updated or if a ‘no change’ declaration has been made at the time the return is submitted”.

However, HMRC also clarified that it will not automatically charge penalties if the box has not been ticked and the register is not updated before the 31 January deadline.

Instead it has committed to taking a “pragmatic approach to charging penalties, particularly where it is clear that trustees or agents have made every effort to meet their obligations”.

The statement continued: “Trustees and agents do not need to submit an amended return if they have updated the register, or made a no change declaration, after the original return was submitted and the only change to the information on the original return is a tick in box 20.1.”

ICAEW’s Tax Faculty understands that trustees have encountered difficulties in claiming trusts and authorising agents. From member feedback it has also emerged that, when updating the register, changes cannot be saved and retrieved to allow for review. HMRC has been asked to consider introducing this functionality for updates, as it is available when registering a trust.

The faculty welcomes HMRC’s pragmatic approach to penalties and reminds members that they should make every effort to update the register or make a ‘no change’ declaration by the deadline.

HMRC also clarified the position on closing trusts on the register. It states that  any registered trust which ceased prior to 28 August 2020, the agent/trustee should use the TRS to note the closure, but this is not obligatory. “Notification can be made by a letter, or in a return, if that is more convenient.” 

For registered trusts which ceased after 28 August 2020, the requirement to use the TRS to note the closure depends on why the trust was registered:

  • If a taxable relevant trust was registered for Fourth Money Laundering Directive purposes, the agent/trustee is required to use TRS to note the closure.
  • If a trust was registered purely to obtain a unique tax reference for self assessment (SA) purposes, the agent/trustee should use the TRS to note the closure, but this is not obligatory. Notification can be made by letter or in a return if that is more convenient.

The statement confirmed: “HMRC would prefer personal representatives and agents to use the TRS to notify the closure of a registered estate, but there is no obligation to do so. Notification can be made by letter or via a SA return if that is more convenient.”

For registered estates where a closure notification has already been made by letter or in a SA return, HMRC clarified that personal representatives or agents are not expected to go back and update TRS as this will be done by HMRC staff.