HMRC has further updated its guidance on compliance with the legislation of the registration of trusts which had tax liability.
New trusts established in the 2017/18 tax year will need to be registered by 5 October 2018 in order to obtain the Unique Taxpayer Reference if they have an income tax or capital gains tax liability.
This is also applies to trusts that have a liability for the Inheritance Tax with Capital Gains Tax or Income Tax liability for the 2017/2018 tax year.
All other trusts that have a relevant tax liability in 2017/18 must register beneficial ownership information about the trust before 31 January 2019 ie. trusts that did not have a tax liability in 2016/17 and therefore were not required to register by 5 March 2018.
If trusts are not registered by the relevant deadline and it cannot be shown to HMRC that reasonable steps were taken to try and register or update details then penalties may be applicable.
HMRC have advised that penalties will not be automatically issued and will be reviewed on a case by case basis. They will also take into account that the tax year 2017 to 2018 is the first year that trustees and agents have had to meet these new registration obligations.
The ability to update trust details via the Trust Registration Service is still unavailable. If the lead trustee or trust correspondence address change then HMRC should be notified by post.
HMRC have advised that Q20 on the SA900 tax return should be left blank for now as it not possible for the lead trustees and their agents to update information or declare that there have been no changes.
HMRC can also charge penalties for money laundering offences which are considered more serious than administrative offences. However these penalties have not yet been formalised, with consultation taking place later this year.
The fifth version of the EU-wide Money Laundering Directive came into force on 10 July 2018. This will require the registration of the beneficial ownership of a UK resident express trust and non-EU express trusts that own UK real estate or have a business relation ship with an entity obliged to carry out anti money laundering checks. The deadline for implementation of the registration of trusts by the UK is 10 March 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.