The HMRC Trust Registration Service has now been launched and will require trustees of trusts with UK tax liabilities to be registered using the online trusts register
HMRC have recently confirmed that the deadline for trustees of trusts that have never registered with HMRC, but incurred a tax liability during the 2016/17 tax year, has now been extended from the 5 December 2017 to the 5 January 2018.
Whilst this is welcome for trusts affected, the 5 January 2018 deadline is still not far away. Set out below are the key points for trustees to be aware of, especially for trusts in the context of share schemes and employee ownership arrangements.
The new legislation is likely to apply to UK resident and non-UK resident employee benefit trusts, including employee ownership trusts and share incentive plan trusts if the trustees are liable to pay any of the taxes listed below in relation to trust assets or income.
Essentially, a trust is required to register with HMRC where it is liable to pay:
Trustees should act now to collate the information required by the legislation and comply with the reporting obligations as set out by HMRC. These being for:
The relevant information to be provided by trustees includes:
For those trusts with a class of beneficiaries, some of whom have not been determined, trustees need only provide a description of the class of persons who are beneficiaries or potential beneficiaries.
A failure to comply with these new requirements could expose trustees to both civil penalties and the risk of prosecution, leading to fines or imprisonment. HMRC have however indicated penalties will be proportionate.
Let us know if you would like to discuss the changes and help you through any steps you should take to comply with the new legislation. Equally, TLT can assist with the registration of your trust. If you would like to discuss, please contact, Matt Atkinson on 0333 006 1406This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions