New Year, New Obligations for Trustees

11th January 2021 Wills, Trusts & Estate Planning

As the old saying goes, nothing in this world is certain, which is especially relevant in today’s world, but one of life’s certainties is taxes. With the Trust Registration Service now in full swing, the deadline of 31 January 2021 for Trustees to report any tax liabilities in their Trusts is looming ever closer and below is a brief overview of what Trustees’ obligations are for the upcoming deadline.

When to update the Register? 

Whilst Trustees have had the ability to register their trusts since 2017, this is the first year in which Trustee are able, and obligated, to update the register with any changes to the Trust, i.e. change of trustees/beneficiaries.

Under the current regulations, Trustees are required to update the data on the register for any changes by 31 January following the tax year in which the change occurred. If there are no changes to the data on the register, but a UK tax liability arose in that tax year, the Trustees must still confirm via the TRS that there are no changes and all details on the register are up to date on or before 31 January.

By way of example, if your Trust incurred a UK tax liability in 2019/20, as Trustee you must either update the register or confirm that there have been no changes to the data previously submitted, by 31 January 2021. In terms of previous tax years from 2017 onwards, as there was formerly no function for Trustees to report changes, the position is simple. If there was a reportable change before 6 April 2020, and a liability for any of the three years in 2017/18, 2018/19 or 2019/20, Trustees must now take steps to update the register by 31 January 2021.

Appointing an Agent to update the Register

Due to the complex, and to some time consuming, nature of the TRS procedure, it is commonplace and highly advisable that Trustees appoint an agent to act on their behalf when updating the Register via the TRS. Whilst HMRC are aware that this is the first year in which Trustees are able to update the register, and as such will take a pragmatic approach to honest mistakes and penalties issued, it is important that Trustees fulfill their obligations and are not late in reporting any changes.

As a firm specialising in Trusts, with experience of dealing with the TRS and the changes that have been made to the system, JMW are perfectly placed to act as agent for Trustees.

If you are a Trustee and have any questions about the TRS and upcoming deadlines, or wish to appoint an agent to act on your behalf, then please do get in touch and we will be happy to talk you through the process.

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Alex Streeter is a Trainee Solicitor located in Manchesterin our Trainee Solicitors department

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