HMRC has launched its online Trusts Registration Service after a short delay. The service was originally meant to be introduced alongside the beneficial owner registration requirements of the EU’s Fourth Money Laundering Directive (4MLD), which came into force at the end of June. It replaces the paper 41G(Trust) form and overhauls the process trustees use to notify HMRC of changes in circumstances.
The Register allows HMRC to collect and store adequate and up-to-date trust information centrally in line with the 4MLD requirements. Any trust that generates a ‘tax consequence’ will be required to provide information about the identity of the settlor, trustees, protector, beneficiaries or any other person exercising control over the trust, as well as details about the assets held.
Paula Steele, managing partner at John Lamb Financial Planning, says: “The new process means reporting obligations have become more onerous for many trustees who were previously exempt from completing a 41G(Trust) form when there was no income arising or no likelihood of income or gains in the future.”
Trust details must now be registered or updated online in any year that the trust generates a tax consequence – for example income tax, capital gains tax, inheritance tax (IHT) or stamp duty. Little has changed for trusts that hold collective investments apart from when and how the information is provided.
For trusts that only hold onshore and/or offshore single premium investment bonds the new rules mean that online registration will not be required unless a chargeable event or a chargeable occasion for IHT occurs. Onshore and offshore trusts will be required to register, but bare trusts are excluded from reporting as the tax liability is generally with the beneficiary rather than the trust.
Trustees have until 5 October 2017 to register new taxable trusts and until 31 January 2018 to provide information about existing trusts.