Changes made to the Automatic Exchange of Information (AEOI) regulations earlier this year mean that trusts and other entities considered to be a reporting Financial Institution or a Trustee Documented Trust are required to register with HMRC by 31 December 2025, even if they have no non-UK connections to report.
Background
The AEOI regulations were introduced in 2015 to ensure transparency and compliance between the UK and other countries' tax authorities where there is an exchange of financial information.
The regulations were updated in July 2025 to ensure that any trust, company or partnership which is considered either a reporting Financial Institution or a Trustee Documented Trust is registered with HMRC, even if they are not required to report under the AEOI regime.
Prior to the July 2025 amendments, only entities which were classed as a Financial Institution and had non-UK connections to report via the AEOI service had to register with HMRC. For UK trusts which qualified as a Financial Institution, this would typically have been where one or more of the settlors, trustees or beneficiaries was non-resident.
New registration requirement
The new rules mean that registration with HMRC will be required by:
- Trusts, companies or partnerships which are classed as a reporting Financial Institution under the Common Reporting Standard (CRS) or Foreign Account Tax Compliance Act (FATCA).
- Registration is required even if the entity does not have non-UK connections to report, meaning that they are not actually required to report under the CRS or FATCA.
- Trustee Documented Trusts, including those which do not have non-UK connections to report via the AEOI service.
- UK Trustee Documented Trusts are generally trusts which hold financial assets (such as an investment portfolio) which are professionally managed, or have a professional trustee (such as a corporate trustee).
The key point arising from the changes is that all reporting Financial Institutions and Trustee Documented Trusts must register with HMRC, even if they have nothing to report under AEOI.
The term 'Financial Institution' is widely defined, meaning that family trusts and other entities such as partnerships and companies may well meet the definition.
- The tests as to whether an entity is a Financial Institution are complex. HMRC's guidance can be found in their manuals at IEIM400600.
The Association of Taxation Technicians (ATT) highlights that the main impact will be on UK trusts classified as Financial Institutions, where all relevant parties (settlor, protector, trustees and beneficiaries) are UK individuals.
- The ATT say that these trusts are likely to be registered for FATCA with the IRS in the US, but are unlikely to have previously needed to be registered for AEOI.
- In order to ensure that HMRC now has full oversight of the population of Financial Institutions, a third registration (AEOI) is needed with HMRC as well.
Registration and deadlines
HMRC have advised that registration is a one-off process and there is no requirement to submit nil returns.
Registration can be done through HMRC's AEOI portal.
- For trusts currently affected, the registration deadline is 31 December 2025.
- For new trusts, the deadline is 31 January following the calendar year in which the trust first becomes a Reporting Financial Institution or Trustee Documented Trust.
Once a registration has been made on HMRC's portal, it is not possible to make another filing for 24 hours. Agents can make up to 250 registrations in a single filing, however.
Penalties
HMRC may charge a penalty of £1,000 if trusts are not registered by the deadline, with further daily penalties of £300 per day if non-compliance continues, unless there is a reasonable excuse for the failure.
Following representations from the professional bodies around the challenges of meeting the 31 December 2025 deadline, HMRC have advised that they will not issue late filing penalties automatically, sharing the following text:
"If you represent Financial Institutions or Trustee-Documented Trusts, please ensure they are registered by this deadline, or as soon as possible afterwards. Late registration penalties will not apply if you have a reasonable excuse for any delay in registering. If you need any support with registering, or think you will be unable to meet the deadline, please email
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External links
Association of Taxation Technicians (ATT): Urgent 31 December 2025 registration deadline for some trusts and companies
Institute of Chartered Accountants in England and Wales (ICAEW): Trusts must meet new registration requirement by 31 December
Institute of Chartered Accountants of Scotland: Registration required for Reporting Financial Institutions and Trustee-Documented Trusts by 31 December
HMRC: IEIM400000 - Automatic Exchange of Financial Accounts Information