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HMRC launched a project earlier this year which will deliver a system to administer a register of trusts that generate tax liabilities. Subject to appropriate regulations, a new process is expected to be introduced in 2017.
The trust register is the first step in the journey towards moving the trust and estate customer base towards the Making Tax Digital strategy which aims to bring together registration and tax reporting services into one place. The trusts register will replace the current paper 41G form and the ad-hoc process for trustees to notify changes in their circumstances.
Under the requirements of article 31 of the EU Fourth Anti Money Laundering Directive (4MLD), the Register will provide a route for trustees to comply with their mandatory registration obligations. It will improve the processes around the administration of trusts and allow HMRC to collect and hold adequate and up to date information in a central register.
This will affect customers who need to register new trusts with HMRC and existing trustees who will need to provide and update their details. We understand that new regulations are being drafted to introduce the Directive into UK law and that this will be issued for public consultation in the New Year.
The regulations will make it clear that trustees of all trusts must maintain the information about all the people associated with the trust and that those that have a tax consequence must report this information on the trust register.
The obligation to complete and maintain the register up to date and accurate will be linked to the obligation to file an SA900 return.
