FINANCIAL ADVICE CENTRE NEWS
Your Autumn Newsletter 2022
Good To Know
Trust Registration Service update
The Trust Registration Service (TRS) opened in 2017 with the aim of digitalising the trust registration process. Following the UK’s adoption of the EU’s Fifth Anti-Money Laundering Directive (5MLD) in 2020, changes to the TRS were required in order for HM Revenue and Customs (HMRC) to fulfil its obligations under the new regulations.
The new rules require all UK express trusts and some non-UK trusts (including most non-taxable trusts) to register with HMRC. The TRS began accepting registrations from non-taxable trusts in September 2021, with an initial deadline of 10 March 2022. Due to delays in getting the TRS prepared, this deadline was later amended to 1 September 2022.
Rules relating to non-taxable trusts
The September 2022 deadline applies to all trusts that existed on or after 6 October 2020 – even if they are now closed. Following this deadline, all new trusts (and any changes to the details of existing trusts) must be registered within 90 days. In order to not penalise trusts set up close to the September 2022 deadline, however, the 90-day rule will also apply to trusts set up on or after 2 June 2022.
Which non-taxable trusts are exempt?
There are some trusts that are exempt from registration unless they pay UK tax. Some examples include trusts used to hold money or assets of a UK-registered pension scheme, trusts holding life insurance and other policies that pay out upon a person’s death, charitable trusts and will trusts.
We understand that the rules relating to trusts are complex, so please don’t hesitate to contact us if you are unsure.
IHT share loss relief
In challenging market conditions, it’s likely that some bereft individuals will inherit investments that have fallen in value. Through IHT share loss relief, people inheriting can be entitled to claim a tax rebate when they sell certain qualifying investments at a loss. Strict rules, criteria and exemptions apply however. For example, to be eligible for the relief, the sale of the qualifying investment (shares listed on a recognised stock exchange excluding AIM, government bonds and / or holdings in investment funds) has to be within 12 months of the date of death. Interestingly, according to recent data11, few people reclaim the overpaid tax, with just 1,640 taxpayers a year on average (between 2014 and 2019) applying for refunds.
11 FoI request Boodle Hatfield, 2022