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HMRC update trust registration guidance

Newsletter issue - August 2018.

HMRC have updated guidance on registering a client trust to clarify which types of trust must be registered and the deadlines for registering.

The online guidance - Register your client's trust - explains how tax agents with client trusts with a tax liability can register online. The guidance has recently been updated to show the types of trust that must be registered and the deadlines for doing so.

The guidance refers to an 'express trust', which, broadly, is an arrangement where there is a clear and expressed intention to create a trust. It is usually created by a written document (a trust deed).

Registration deadlines for each tax a trust might be liable to are as follows:

Examples

A trust has a new tax liability for income tax in 2018/19 must be registered by 5 October 2019.

A trust has a tax liability for Stamp Duty Land Tax in 2018/19 must be registered by 31 January 2020.

Penalties

The lead trustee may have to pay a penalty if they do not register the trust before the registration deadline.

If they do not register or update the information, and cannot show HMRC that they took reasonable steps to do so, the penalties are:

Penalties will not be issued automatically and will be reviewed on a case by case basis.

HMRC will also take into account that tax year 2017/18 is the first year that trustees and agents have had to meet the new registration obligations.