HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.
Trusts Registration Service (TRS)
The TRS enables trustees and their agents to register trusts and complex estates online.
Deadlines for registration of trusts:
- If the trust already has a UTR and is submitting a SA tax return for 2017/18, but is not yet registered on TRS, the deadline for registering is 31 January 2019.
- Any trust requiring a new UTR to submit a 2017/18 SA tax return should have registered on TRS by 5 October 2018. If you have not done so, you should register immediately.
Updating the TRS:
- It is not yet possible for lead trustees and agents to update their registered information or to declare that there have not been any changes.
- Following user feedback, HMRC are switching to a new system (a ‘micro service’) which will be more intuitive, easier to navigate and have several advantages over the current ‘iForm’ service. They intend to roll out the new service at the start of the summer of 2019.
- Trustees or agents who need to inform HMRC that the lead trustee or trust correspondence address has changed should write to HMRC to amend the details on the register.
- Question number 20 on the SA900 trust tax return asks if the TRS has been updated. HMRC advise that completed SA900 forms should be submitted without answering Question 20 and leaving the tick box blank. HMRC have said that they will not be penalise trustees for not answering Question 20.
As part of their commitment to continuously improving Trusts and Estates services, HMRC are holding multiple research sessions with agents to understand their requirements and would like to hear from agents interested in participating in:
- Experiences of Trusts and Estates online registrations
- Prototype testing of potential changes to features and design of the service
Those interested in taking part in any of the above sessions should email HMRC at:
The Fifth Anti-Money Laundering Directive (5MLD)
- The TRS currently only applies to taxpaying express trusts but 5MLD will expand it to all express trusts regardless of whether they pay tax or not.
- HM Treasury will shortly be publishing a consultation asking for views on how the UK interprets and implements this requirement.
Taxation of trusts consultation
HMRC has published a new consultation ‘The Taxation of Trusts: A Review’ considering whether the current system for taxing trusts meets the principles of transparency, fairness, neutrality, and simplicity. areas.
Inheritance Tax Manual: Speciality Debts
- Following consultation with stakeholders, HMRC has published updated guidance on the IHT treatment of specialty debts.
- The revised sections of the IHT Manual can be found at IHTM27079, IHTM27080 and IHTM27104.
- The position also applies for the remittance basis.
IHT: Application for Confirmation in Scotland
- Earlier this year minor amendments were made to Form C1, used to apply for Confirmation in Scotland.
- HMRC advise that the latest version of the form can always be found on GOV.UK and the current reference number, found on the bottom right of the form, is 06/18. It has been agreed with the Scottish Courts and Tribunal Service that the 03/17 version of the form will continue to be accepted, but HMRC advise that customers should move to using the latest version as soon as possible. Those using third party supplier software should continue to do so as updated versions of their forms will be accepted.
IHT Reference for a Taxpaying Lifetime Event
- If you have not already got a reference and need to pay IHT on an event such as:
- a transfer into a trust
- a ten-year anniversary on a trust
- assets that have stopped being held in a trust or being relevant property
you must apply for a reference, on form IHT122, for each event, before sending HMRC your account.
- If you do not get a reference it may take time for HMRC to trace your payment and match it to your account.
- If you are sending form IHT400 and tax is due, you should apply for a reference online or use form IHT422 – Application for an Inheritance Tax reference.
Correspondence Scanning issues - avoiding delays
- To avoid delays with documentation being scanned onto their system HMRC request that you do not send them:
- Cheques. Electronic payments are preferred but if you do pay by cheque you should send it separately to HMRC Cumbernauld.
- Documents and valuations with any sort of binding, instead send unbound copies.
- Original documents of any sort unless specifically requested.
- Oversized documents, larger than standard A4 size.
- HMRC advise that your form IHT400 will be dealt with more quickly if you:
- send double-sided copies
- place any IHT405 forms and valuations of houses, buildings and land at the back of the documents you are enclosing.
The following HMRC toolkits may be helpful for trustees and agents when dealing with trust tax affairs.
- The HMRC trusts and estates toolkit
- The HMRC Capital Gains Tax (CGT) for trusts and estates toolkit
- Use this toolkit if you need to complete form SA905 trust and estate capital gains supplementary pages.
- The Inheritance Tax (IHT) toolkit
Links to our guides:
A guide to what a trust is, types of trust and their tax treatment.
This guide covers theUK taxation of non-resident trusts, planning tips and pitfalls to look out for.