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HMRC have released statistics on the number of trusts in existence for 2017/18 and how much their tax liabilities were. The number of trusts may have dropped but those trusts paid more tax than in the previous tax year.

Records show there were 149,000 active trusts in 2017/18; a 6% decline compared to 2016/17, but tax due saw a 5% increase over the same period.

This would appear to be the result of a significant (30%) increase in dividend income. Capital gains and other income remained relatively static across the two periods, excepting interest income which declined. Whilst HMRC do not seek to explain the change in income split, it seems likely that trustees may have been switching investments to higher yielding stocks and shares and away from low interest savings.

Under the Trust Registration service all trusts with UK tax liabilities must be registered with HMRC under an online registration system.

However, the online register is not where HMRC have obtained their figures for these statistics. HMRC lists submitted self-assessment returns as their source. The figures will not then include trusts with no tax liabilities or with taxes due which are not covered by self-assessment, such as IHT.

The deadline for registering new trusts and existing trusts with a UK tax liability for the first time is 6 months after the end of the tax year. For 2018/19 the deadline of 5 October 2019 is approaching; trustees and advisers should review trusts for which they are responsible immediately to see if there is a requirement to register. This may be especially relevant for long-established trusts which may have been overlooked and now have IHT due because the ten-year anniversary falls in the 2018/19 tax year.

Links to our guides:

UK trusts 

Non-resident trusts 

Trusts & Estates: Ten-year charge reporting requirements 

External link:

National Statistics: Number of trusts and estates, income and tax from trusts by type of trust and type of tax - September 2019