The deadline for registering non-taxable trusts that became registerable on or after 6 October 2020 is 1 September 2022 – or 90 days if longer. This is now less than a month away.
A previous news item highlighted the support available to ICAEW members. Registrations must be made on HMRC’s trust registration service (TRS). The process for digitally excluded trustees is still in development.
The new sections cover:
In recognition of the fact that the registration requirement is a new and unfamiliar obligation for many trustees, there will be no penalty for a first offence of failure to register or late registration of a trust. The exception is when that failure is shown to be due to deliberate behaviour on the part of the trustees. In that case, or where there are repeated failures, a £5,000 penalty may be charged per offence.
In practice, this means that, should HMRC become aware of a trust which has not been registered by the relevant deadline – either because that trust has been registered late or because HMRC has identified that trust’s existence by other means – HMRC may issue a warning letter to the trustee or agent. It would usually only charge a penalty if that letter were not acted on.
Similar penalty rules apply to the requirement to update the information held on the TRS.
The manuals include the answers to some frequently asked questions:
- TRSM32020 confirms the position for non-taxable trusts with a dormant unique taxpayer reference (UTR) who should answer ‘no’ when asked if they have a UTR.
- TRSM23150 confirms the position where the trust is established in a European Economic Area (EEA) member state and is required to be registered on the equivalent beneficial ownership register of that member state.
- TRSM23110 covers the position on trusts for holding client money and for holding tenant contributions for the purposes of s42, Landlord and Tenant Act 1987.
- TRSM10030 has a useful list of common types of trust and how they interact with the register.
- TRSM23160 explains the exemption for bank accounts held for minors and the limits to that exemption.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
More support on tax
ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.Sign up for TAXwireJoin the Tax Faculty
The future of tax after COVID
As digital technologies transform society, the UK government is grappling with balancing the books while ensuring its tax system is fit for purpose. Join us as we take a look at the issues and challenges facing the tax system.Read more
More from the Tax Faculty
Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter
Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.
Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.