Trusts can be a complex subject when it comes to tax. Recent changes mean that even the most basic of arrangements might need to be declared to HMRC. What penalty could you incur if you don’t get things right?
The trust registration service was introduced to provide HMRC with details about trust assets and beneficiaries – to help prevent money laundering. Initially, only trusts with a tax liability were required to register – but the regulations have since been extended to most trusts. New HMRC guidance confirms that a fixed penalty of £5,000 applies if a trustee fails to register a trust, or maintain the trust register. However, the guidance also states that, as this is a new requirement, penalties won’t be charged if the failure was not deliberate, and the register is updated within a time limit set by HMRC.
The deadline to register the majority of trusts was 1 September 2022. You can check whether your arrangement needs to be registered here.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.