Register of beneficial ownership of trusts

Register of beneficial ownership of trusts

Sat 08 Jul 2017


The Government has announced the issue of the 4th anti-money laundering regulations. They came into force on 26 June 2017.  Amongst other things the regulations require HMRC to establish a trust register.

Register of trusts

The trustees of a ‘taxable relevant trust’ will need to provide the information for the register to HMRC on or before 31 Jan 2018, or on or before 31 Jan following the tax year in which the trustees are first liable to pay relevant UK taxes.  This information will include information on beneficiaries of the trust.  This will result in new compliance obligations for trustees to deal with.


For the purposes of the regulations, a taxable relevant trust is a relevant trust in any year in which its trustees are liable to pay any of the following taxes (relevant taxes) in the United Kingdom in relation to assets or income of the trust:

    1. income tax;
    2. capital gains tax;
    3. inheritance tax;
    4. stamp duty land tax;
    5. land and buildings transaction tax;
    6. stamp duty reserve tax.

In the case of a collective investment scheme, a reference to the trustees of a taxable relevant trust includes a reference to the manager or operator of the collective investment scheme.

A “relevant trust” is:

    1. a UK trust which is an express trust; or
    2. a non-UK trust which is an express trust; and
  1. receives income from a source in the United Kingdom; or
  2. has assets in the United Kingdom, on which it is liable to pay one or more relevant taxes;

As regards bare trusts, further comment is made below.


Information to be supplied for the register

The information required about the trust will be:

  1. the full name of the trust;
  2. the date on which the trust was set up;
  3. a statement of accounts for the trust, describing the trust assets and identifying the value of each category of the trust assets at the date on which the information is first provided to the Commissioners (including the address of any property held by the trust);
  4. the country where the trust is considered to be resident for tax purposes;
  5. the place where the trust is administered;
  6. a contact address for the trustees;
  7. the full name of any advisers who are being paid to provide legal, financial or tax advice to the trustees in relation to the trust.

The information required about each actual or potential beneficiary (who can be identified) will be:

    1. the individual’s full name;
    2. the individual’s national insurance number or unique taxpayer reference, if any;
    3. if the individual does not have a national insurance number or unique taxpayer reference, the individual’s usual residential address;
    4. if the address provided under sub-paragraph (c) is not in the United Kingdom—
  1. the individual’s passport number or identification card number, with the country of issue and the expiry date of the passport or identification card; or
  2. if the individual does not have a passport or identification card, the number, country of issue and expiry date of any equivalent form of identification;
  1. the individual’s date of birth;
  2. the nature of the individual’s role in relation to the trust

If there is a class of beneficiary where individuals have not yet been identified, information is required on the class of beneficiary.  If there is any legal person who is a beneficiary, then details are required of the legal entity.


Bare trusts

A bare trust is an express trust. A bare trust exists whenever title to property is vested in one person to be held for the benefit of another.

IHTA 1984 s.199(1)(c) provides that persons liable for tax on the value transferred by a chargeable transfer includes, so far as tax is attributable to the value of any property, any person in whom the property is vested (whether beneficially or otherwise) at any time after the transfer, or who at any such time is beneficially entitled to an interest in possession in the property.  Thus if property is transferred to a bare trust, and the donor dies within seven years, if the beneficiary cannot pay any IHT due, HMRC are entitled to look to the trustees to find the tax due.

A bare trust may own a property for the purpose of a business, so that it is by bare trustees for the benefit of other investors in the business and such that the property should qualify for business property relief. Where an investor directs the trustees to transfer the property to a beneficiary, who sells the property and does not replace it with relevant business property, and the original donor dies within seven years of having given the property, then IHTA s113A may prevent business property relief from applying.  This may be another instance where the bare trustees may become liable for any inheritance tax due, and hence be within the scope of the requirement to register details for the register of trusts.

When the regulations were in draft form STEP indicated that bare trusts would be excluded from reporting. However there does not appear to be any such exclusion in the final regulations.  HMRC’s guidance is awaited.






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