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Have you registered your trust with HMRC?

All trustees of UK and non-UK trusts are potentially within the requirement to register their trust with HMRC under the Trust Registration Service (TRS).

On 8 December 2017, HMRC announced that while the 31 January 2018 deadline for making a TRS submission would remain in place, they would not charge a penalty if trustees or their agent failed to register before then as long as they did so by 5 March 2018.

HMRC have also now said that they will not automatically charge penalties for late TRS returns but will take a pragmatic and risk-based approach to charging penalties, particularly where it is clear that trustees or their agents have made every reasonable effort to meet their obligations under the regulations, especially as this is the first year of the TRS. 

Where a penalty is applied, they will mirror the Tax Return penalties:

Registration made up to three months from the due date – £100 penalty

Registration made three to six months after the due date – £200 penalty

Registration more than six months late – either 5% of the tax liability or £300 penalty, whichever is the greater sum

HMRC have confirmed that a penalty will not be payable if they are satisfied that the trustees took reasonable steps to comply with the regulations but please see our article on Mr Mark Beardwood in this issue for comparison (‘HMRC's liberal use of penalties checked’).

It is also worth being aware that HMRC seem to be grabbing all strings because they have made clear that they also have the power to apply a penalty for Money Laundering offences but “will not bring these penalties in immediately”. HMRC are to consult on the structure of these penalties this year so watch carefully and take part in the consultation if you are a professional trustee or someone who has the time.

See here for more details on the TRS.

If you require any guidance or advice in this area, please approach your usual Buzzacott contact or email enquiries@buzzacott.co.uk.

This article was taken from the Spring 2018 issue of the Private Client team's Quarterly Tax Digest. You can access all the other articles here.

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