Trustees of both existing and new taxable “relevant trusts” need to maintain accurate and up-to-date written records of all beneficial owners.
A taxable relevant trust is any trust which is liable to pay any UK tax in a tax year. This means that, once the trustees are required to submit a tax return to HMRC, they are also obliged to provide information to the trust register on the beneficial owners. The information must be provided on or before 31 January after the tax year in which the trustees were first liable to pay tax.
The trust register provides a single point of access for trustees and their agents to record information.
Beneficial owners include named beneficiaries as well as any potential beneficiary named in a letter of wishes or other relevant document. Under a discretionary trust, if a class of beneficiaries has been included, the trustees just need to keep a record of a description of the class of persons who are beneficiaries or potential beneficiaries under the trust. However, if the settlor has indicated that certain beneficiaries should only benefit if other named beneficiaries die, then the trustees do not need to include them in their records.
It is important to note that, where the only asset held by the trust is an investment bond, then the trustees are only obliged to provide information to the trust register when a chargeable gain occurs and the trustees are liable, or when a periodic or exit charge is payable.
The trustees will need to provide the following information:
- the full name of the trust and the date it was set up;
- a statement of accounts identifying the value of each category of the trust assets (including the address of any property held by the trust);
- the country where the trust is resident for tax purposes;
- the place where it is administered;
- a contact address for the trustees;
- the name of any advisers who are being paid to provide legal, financial, tax or other advice to the trustees.
- In respect of an individual beneficiary
- NI number or unique taxpayer reference (if any). If they don’t have an NI number or unique taxpayer reference their usual residential address;
- if the address is not in the UK the trustees must hold the passport number, country of issue and expiry date (or an equivalent form of identification);
- date of birth;
- the nature of their role in relation to the trust. Where the trust holds collectives, this information will need to be provided once any interest or dividends are generated.
Trustees will need to update the trust register, with any changes, each year that the trust generates a UK tax consequence. If there are changes, other than the value of the trust assets, the trustees must inform HMRC on or before 31 January after the tax year in which the change occurred.
This document is based on Canada Life’s understanding of applicable UK tax legislation and current HM Revenue & Custom’s practice, as at June 2020 and could be subject to change in the future. It is provided for professional advisers only. Any recommendations are the adviser’s sole responsibility.