The UK trust register: How it will affect beneficiaries

A trust will need to register if it is:

• A UK trust which is liable to pay one or more relevant UK taxes for a particular tax year; or
• A non-UK trust which directly holds assets in the UK and is liable to pay one or more relevant UK taxes for a particular tax year.
  
  

Relevant UK taxes are defined as:

• Income Tax
• Capital Gains Tax (CGT)
• Inheritance Tax (IHT)
• Stamp Duty Land Tax (SDLT)
• Stamp Duty Reserve Tax (SDRT)
• Land and Buildings Transaction Tax (LBTT)
  
  

If the trust is a non-UK trust that does not have any UK source income or hold any UK assets directly it will fall outside the scope of the UK trust register. 

Trustees must generally provide information by 31 January 2018, however, earlier deadlines can apply in certain circumstances.  

Trustees must also inform HMRC of any changes to the trust. This must generally be done by 31 January following the end of the tax year in which the change occurred, assuming the trustees were liable to file a tax return in that year. 

For trusts within the scope of the register, information is required in respect of:

• The trust;
• Trust assets;
• Beneficial owners; and,
• Any advisers who are being paid by the trustees to complete the UK trust register.

The definition of ‘beneficial owner’ is wide ranging and in the context of a trust, encompasses all of the following:

1. The settlor(s);
2. The trustees;
3. The beneficiaries, including any potential beneficiaries and classes of beneficiaries;
4. Any individual who has control over the trust;
5. The controllers.
   
   

Beneficiaries

Beneficiaries would include all persons named on the trust deed. Potential beneficiaries would generally include persons indicated by the settlor in a document (such as a letter of wishes) as someone who should benefit from the trust.

Controllers

An individual is considered to have control if they have a power (whether alone, jointly with another person, or with the consent of another person) under the trust instrument or by law to:

• Dispose of, advance, lend, invest, pay or apply trust property;
• Vary or terminate the trust;
• Add or remove a person as a beneficiary or to or from a class of beneficiaries;
• Appoint or remove trustees or give another individual control over the trust;
• Direct, withhold consent to or veto the exercise of a power mentioned in the above.
  
  

The breadth of the definition of control may bring protectors within the scope of the Regulations. 

The following provides an overview of the various information that will need to be reported. 

The Trust

In relation to the trust, the trustees must disclose: 

• The full name of the trust;
• The date on which the trust was set up;
• The country of tax residence;
• The place where the trust is administered;
• A statement of accounts for the trust describing the trust assets, address of any real property and the value at the date on which the assets were first settled in the trust;
• The contact address for the trustees;
• The full name of any advisers who are being paid by the trustees to complete the UK trust register.
  
  

Beneficial Owners and Potential Beneficiaries - Individuals

For beneficial owners and potential beneficiaries that are individuals, such as the settlor(s), beneficiaries and persons with control, the information requirements are much more extensive than at present. The information to be disclosed includes:

• The individual’s full name;
• The individual’s date of birth;
• The individual’s role in relation to the trust (e.g., settlor, beneficiary, person with control etc.);
• The individual’s National Insurance Number (NINO) or Unique Taxpayer Reference (UTR);
• If no NINO or UTR is available, the residential address of the individual;
• If the residential address is outside the UK, the passport number or ID card number of the individual, along with the country of issue and expiry date.
  
  

For classes of beneficiaries, the trustees must provide a description of the beneficial class on the trust register. There are expected to be instances where individuals within the class need to be separately identified and reported as above, however, there is still some uncertainty with HMRC as to when this is required.

Beneficial Owners and Potential Beneficiaries – Legal Entities

Where the beneficial owner or potential beneficiary is a legal entity (e.g. a body corporate), the trustees must disclose the following:

• The legal entity’s corporate or firm name;
• The legal entity’s role in relation to the trust (e.g. settlor, beneficiary, etc.);
• The legal entity’s unique tax reference number (if any);
• The registered or principal office of the legal entity;
• The legal form of the legal entity and the law by which it is governed;
• If applicable, the name of the register of companies in which the legal entity is entered, the company registration number and the jurisdiction in which the company is registered.

The information provided is held on the UK trust register by HMRC. HMRC may use the information to review the tax filings of named beneficiaries and settlors to ensure this is consistent with the information on the UK Trust Register.

The information held on the trust register is not available to the public, however, it may be shared with law enforcement authorities such as the Financial Conduct Authority, The Serious Fraud Office and the Metropolitan Police. The UK Government have confirmed there is currently no intention for any of the information to be made public. 

Reportable persons will need to provide the relevant information to ensure we can accurately and fully complete the trust register. Alongside the disclosure obligations, the Regulations also impose an information gathering obligation on trustees. In particular, trustees are required to ensure they hold relevant, up to date, information for each of the persons reportable under the UK trust register.