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Where Taxpayers and Advisers Meet

This TRS Registration Scheme

KartRacer
Posts:8
Joined:Sun Dec 18, 2011 12:28 pm
This TRS Registration Scheme

Postby KartRacer » Sun Aug 14, 2022 2:54 pm

Is it just me, or has the whole thing been poorly communicated to those of us who don't 'do all this stuff for a living'.

I am a trustee of a NRB Trust Created under a will in 2011. The trust was regsistered using 41G back in 2011 / 2012 and given a UTR.

Every year, we receive and fill in a SA900.

OK, maybe I misunderstood Q20 which talks predominantly refers to changes.....of which there weren't any or you've confirmed the details are correct.......which went right over my head as the Trust was registered with 41G and the details were correct.

You think they would write to all 'registered trusts' and say, "Dear Sirs, please be aware that even though your trust is registered and you have a UTR, you must now complete and entry on the new TRS and supply additional details to those originally provided"

They just seem to have left if for people to 'trip over'.

Anyway, I've registered the trust on the TRS, which seemed to be quite straightforward after one accepts you have to enter the same information several times where a trustee is also a potential beneficiary.

I only stumbled across this TRS by accident when looking for other info. Is it me or is it a pretty poor show by the HMRC.

Presumably, the reason for us not receiving an SA900 return automatically this year is because our registered trust was unregistered via the new TRS system.

AGoodman
Posts:1734
Joined:Fri May 16, 2014 3:47 pm

Re: This TRS Registration Scheme

Postby AGoodman » Mon Aug 15, 2022 3:16 pm

The whole thing is a complete mess. Non-professionals have no idea and many/most professionals will not know about it either - only those in the very narrow field advising/creating family trusts are likely aware.

The problem is that trusts are pervasive in English law and appear all over the place. However, the original EU legislation was designed by people who were only thinking of large, probably offshore, trusts which as everybody knows (wrongly) are all used to hide criminal proceeds and evade tax. The UK and Irish contingents to the EU should have put them right but they don't seem to have known any better and the Treasury and HMRC have only made it worse - coming up with ridiculous interpretations that bring most partnerships, nominees and estates into the arrangements that need to be registered. HMRC are currently changing their manual (guidance) every two weeks as they realise that it's actually a little more complicated than they thought.

dibby20159
Posts:4
Joined:Tue Aug 16, 2022 9:30 am

Re: This TRS Registration Scheme

Postby dibby20159 » Tue Aug 16, 2022 9:45 am

I am in the process of trying to register 2 bare trusts - one for each of 2 grandchildren aged 15 and 12. They were set up on the birth of each child and regular payments are made into each one, being then invested in a couple of funds.

The registration process was not particularly difficult, but the questions asked in respect of the older child's registration (and I have printed off copies of the draft registrations to compare them) are more comprehensive than those for the younger child. This applies to each section (Trust details, Trustees, Settlors, and Beneficiaries). In addition the questions for the older child include Assets, which asks what assets the trust contains and how much money it now holds. But there is no similar question asked in respect of the other child.

Can anyone tell me please why there are these diferences, and should I be concerned?
Many thanks.

AGoodman
Posts:1734
Joined:Fri May 16, 2014 3:47 pm

Re: This TRS Registration Scheme

Postby AGoodman » Wed Aug 17, 2022 10:55 am

Just a suspicion:

Bare trusts are not taxable trusts so are registered under Regulation 45ZA rather than Regulation 45 (don't ask!)

Under 45ZA, I don't think you need to provide details of the assets.

I wonder if maybe you have ticked the wrong box and ended up registering the trust for the elder as a taxable trust? Just a guess and I'm afraid I can't remember what the questions are. If you get a UTR through the post for the eldest one then that may be the reason.

dibby20159
Posts:4
Joined:Tue Aug 16, 2022 9:30 am

Re: This TRS Registration Scheme

Postby dibby20159 » Wed Aug 17, 2022 9:48 pm

A bare trust is taxable in the sense that tax is payable on the income it generates. In this case my grandchildren would be liable for the tax since I am the settlor, whereas if one (or more) of their parents had been the settlor then the income over £100 would be taxed as if it belonged to that parent. As it is however since the annual income from the trusts my wife and I set up for the grandchildren will not exceed the child's tax free allowance of £12,500 (if only!) then no tax is due.

Thus I reckon that the trust is taxable, but no tax is payable!

That seems logical to me, though maybe not to an HMRC official!

dibby20159
Posts:4
Joined:Tue Aug 16, 2022 9:30 am

Re: This TRS Registration Scheme

Postby dibby20159 » Wed Aug 17, 2022 9:51 pm

But I will go back to the registration web site - I have not yet made the final submission - and check on the question. Thanks.

AGoodman
Posts:1734
Joined:Fri May 16, 2014 3:47 pm

Re: This TRS Registration Scheme

Postby AGoodman » Wed Aug 17, 2022 10:09 pm

You're welcome to your opinions, it's just that the law and HMRC disagree with you:

Reg 14(14) "For the purposes of this regulation, a taxable relevant trust is a relevant trust in any year in which its trustees are liable to pay any of the following taxes in the United Kingdom in relation to assets or income of the trust—..."

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: This TRS Registration Scheme

Postby maths » Thu Aug 18, 2022 10:17 am

The bare trustees have no tax liability. The bare trust is not therefore a taxable trust.

The liability is that of the beneficiaries of the bare trust, not the trustees.

Your understanding is incorrect, albeit AGoodman has put this in a. much more polite and tactful way as is his want !!


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