A trust can either be set up during your lifetime or one can arise on your death by Will or Deed of Variation (a person’s Will can be changed up to two year’s after their death by Deed of Variation provided all the beneficiaries are of age, of sound mind and agree).
Trustees have a duty and legal responsibility to ensure that the trust is run properly. These include holding an annual review of the trust and recording all decisions on formal minutes. Property trusts will require Land Registry work which must be executed correctly and when trustees change or they appoint assets out of the trust, this must be done by deed.
In order to assist trustees, we are now offering a Trust Service.
The cost is £20 plus VAT per month which can be paid from the trust and includes all the services shown in the table (not including disbursements).
We would set up a direct debit to take the payment each month and each year we would contact you to provide information to enable us to produce the annual minutes and any other documents that may be required.
If there are trusts which have been set up by other companies, we would be happy to look over the trust deed or Will and provide the trust service.
Document or service included under our Trust Service
On-demand advice to Trustees
Matters relating to the Trust
£175 per hour
Trustee minutes / decisions
Written recording of trustee decisions and intentions
Letter of Wishes
From the Settlor setting out how they would like the Trust Fund treated
Initial Solicitors letter
In response to a challenge to the Trust
£175 per hour
Transfer of Title
To Trustees at a later date for example when a legal charge or mortgage has been repaid
Register or remove a restriction with Land Registry
When Trust property is sold or loans taken out against it
Deed of Retirement and / or Appointment
Retire a Trustee; add a Trustee
Deed of Appointment or Deed of Advancement
Giving capital from the Trust Fund to a beneficiary
Dismantling a Trust
Winding up the Trust
Adding beneficiaries; relinquishing entitlement to the trust; etc.
TRUST REGISTRATION – when you must register a Trust with HMRC
Notifying HM Revenue & Customs (HMRC) about a new Trust.
Trustees of Trusts are liable for tax. You need to tell HMRC about a Trust if you expect to receive income or make chargeable capital gains. This is so the correct amount of tax can be calculated and paid. In some cases Inheritance Tax may also be payable.
When you need to tell HMRC about a Trust
You should tell HMRC as soon as the Trust is created if you expect a new Trust to:
- Receive income;
- Make chargeable capital gains (profits) from the sale of the Trust assets – such as shares, buildings or land – within the next tax year.
If an existing Trust starts receiving income or making chargeable gains, you need to notify HMRC by 5th October of the tax year after the Trust is set up or when it starts to make income or chargeable gains, if this is later.
Currently there is no need to tell HMRC if a Trust is not going to receive any income or make any chargeable gains however this is set to change with all Trusts being required to register when they are set up. A date is yet to be set for when this comes into effect.
Whose responsibility is it to notify HMRC?
The Trustees are responsible for notifying HMRC if a Trust has been set up that may receive income or make chargeable gains.
The only exception to this is in the case of Bare Trusts, where a beneficiary has the right to income and capital of the Trust and the beneficiaries of these Trusts must declare any income or capital gains on their own personal tax returns.
Get professional help for your Trust
Understanding Trusts can be difficult so you may want to work with a professional advisor. Remember though that the Trustees are still legally responsible for the Trust’s tax affairs. HMRC can communicate directly with your chosen professional advisor if you request this.
How to notify HMRC
HMRC have launched a new Trusts Registration Service (TRS) so that Trustees can register their Trust online and provide information on the beneficial owners of the Trust. The new service launched in early July 2017 for Trustees and replaces the 41G paper form, which was withdrawn at the end of April 2017.
You will be asked to give details of:
- the Trust;
- your own National Insurance, passport or driving licence number;
- the name, address, date of birth and National Insurance number (or passport number) of any individuals of the Trust (this includes Trustees, the Settlors who set up the Trust and the Beneficiaries of the Trust);
- other people with influence or involvement in the Trust;
- assets settled into the Trust and the date they were put in;
- the tax years the Trust needs to declare Income Tax or Capital Gains Tax for;
- the deceased person, if the Trust is being established by a Will or under the rules intestacy (dying without a Will);
- protectors, if any have been appointed.
You don’t need to send copies of any Trust deeds unless HMRC asks you to.
Information you’ll receive after notifying HMRC
Once you’ve notified HMRC, you’ll receive a Unique Taxpayer Reference (UTR) for the Trust. This is a reference allocated when registering to pay tax under Self Assessment. You will need this reference number each time you contact HMRC.
A Trust and Estate Tax Returns will be issued for the first tax year when income has been received or gains have been made by the Trust.
HMRC will no longer issue a Trust and Estate Tax Return in the future if either of the following applies:
- The latest return shows that there is no Trust income or chargeable capital gains;
- You contact HMRC to tell them that a Trust is unlikely to receive income or gains in the foreseeable future.
If you receive a tax return as a Trustee you’re legally obliged to complete and return it to HMRC on time. This applies even if no tax is due.
Notifying HMRC Inheritance Tax about your Tax
The HMRC business area that deals with Inheritance Tax does not need to know when a new Trust is set up. However, they do need to know when Inheritance Tax is due on a Trust. This may be whenever:
- Assets are put into a Trust;
- Assets are taken out of a Trust;
A Trust passes a ten-year anniversary.