The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 were passed on 22 June 2017 and took effect on 26 June. These regulations require a register of beneficial owners of trusts to be created and maintained by HM Revenue and Customs. The information in the Trust Register will not be in the public domain but it is a requirement for trustees to keep this up to date annually.
The registration of new trusts and estates will take place through the trust register as an online process which was made available to trustees personally on 10 July. Unfortunately, this is not available to agents until the autumn – no date yet specified.
Trustees are required to keep the register up to date in the years in which the trustees are liable to pay any UK taxes, for example, any year in which income or gains arise or there is tax payable for inheritance tax, stamp duty land tax, land and buildings transaction tax or stamp duty reserve tax. This is requirement for any trust, UK or Non-UK resident, where there is UK tax payable during the year.
The register requires full names, dates of birth and national insurance numbers (where available) for all trustees, settlors, protectors and potential beneficiaries, detailed in either the trust document or letter of wishes. While this information will be not be in the public domain, it does beg the question – how do you find out the beneficiary’s national insurance number without alerting them to the fact that they are a potential beneficiary detailed in the letter of wishes. This is a really contentious issue and we are contributing to professional bodies questioning the extent to which beneficiaries need to be named (with these details) if they are not actually receiving any income. There is a logical difference between those actually benefitting from income, where it would be reasonable to ask for NI numbers, and the many discretionary beneficiaries who have not yet had any income benefit.
The register also requires details of the trust assets, their value on creation, the country of residence for the trust and the place where the trust is administered. In addition, the full name of any advisers who are being paid to provide legal, financial or tax advice, must be included.
The deadline for submission is 31 January 2018 or 31 January after the year in which the trustees were first liable to pay UK taxes, this submission can just be confirmation that no details have changed. HMRC accept where there is no taxable event during the year the trust register will be out of date, but the record will remain open until the trust ends. It appears that a taxable event where there is no actual tax payable, such as a 10 yearly charge for trusts were no IHT is payable, will not require registration, but this needs to be confirmed.
Published: 20 July 2017
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