HM Revenue & Customs (“HMRC”) has announced that the online central register for trusts, the “Trusts Registration Service”, will be launched very shortly. The register has been brought in to assist the UK government comply with the EU’s 5th Money Laundering Directive which came into force on 26 June 2017.
Trustees anywhere in the world will be required to register any trusts who have UK assets that generate any UK tax consequences; these include income tax, capital gains tax, inheritance tax, non-resident capital gains tax, and stamp duty land tax. This includes old trusts that have registered with HMRC in the past using the now defunct 41G (Trust) form.
The register will ask for:
- details of the trust assets including address(es) and values,
- the identity of the Settlor, trustees, protector (if any), all other persons exercising effective control over the trust (if any) and the beneficiaries or class of beneficiaries.
The information required will include:
- name and address,
- date of birth,
- National Insurance number if they are UK resident – unless a minor,
- Passport or ID number for non-UK residents, if there’s no UK National Insurance number.
The service will be phased in gradually. Trustees will need to register new trusts by 5th October 2017, and until 31st January 2018 to provide information on existing trusts.
At present the information held on the register is not open to the public. However, the Directive contains a proposal to make the beneficial ownership of trusts public. This is making its way through the EU parliament and, in any event, it is not known whether the UK government will agree. Consultation on this matter is proposed. In the meantime, the information will be shared with law enforcement agencies and used to verify UK tax residents’ tax obligations.
There have been a number of concerns already raised about the register. The Information Commissioner’s Office has warned that trust register would “pose a real risk of identity theft if made public”. Even if the register is not made public, there is a concern about the security of the data on the register. The National Audit Office reported that personal data security was breached 6,041 times by HMRC in 2014/15.
If you need guidance about whether your trust has an obligation make a report to HMRC or if you are concerned about undeclared liabilities that may be discovered in consequence of the registration, please contact Priya Dutta on 0203 008 8108.