With effect from 26th June 2017, the UK has introduced the requirement for HMRC to maintain a register of beneficial owners and potential beneficiaries of taxable relevant trusts.
‘Taxable relevant trusts’ includes cases where the trustees are both UK resident and non-UK resident, where they are, or become, liable to pay any UK tax. Accordingly, non-UK trustees will be outside the UK registration/reporting requirements unless, and until, they become subject to UK tax liabilities in relation to the trust in which they act as trustee.
In satisfaction of these requirements, HMRC must maintain a register of:
- beneficial owners and other potential beneficiaries of taxable relevant trusts;
- ensure that the information on the register may be inspected by any law enforcement authority;
- make arrangements to ensure that the National Crime Agency is able to use the information on the register to respond promptly to a request about beneficial owners and other potential beneficiaries by relevant overseas (EEA State) authorities.
The register may be in any form that HMRC considers fit however it must contain the information identifying beneficial owners and other potential beneficiaries in relation to taxable relevant trusts.
Information to be provided about the trust
The information that the trustees of taxable relevant trusts must provide to HMRC include:
- full name of the trust;
- date on which the trust was settled;
- 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 HMRC (including the address of any property held by the trust);
- the country where the trust is considered to be resident for tax purposes;
- the place where the trust is administered;
- contact address for the trustee(s);
- full name of any advisers who are being paid to provide legal, financial or tax advice to the trustees in relation to the trust.
Information to be provided about individual beneficial owners and other potential beneficiaries
The information that the trustees of taxable relevant trusts must provide to HMRC about individuals who are beneficial owners or other potential beneficiaries of relevant trusts includes, amongst others:
- individual’s full name;
- National Insurance Number or unique taxpayer reference, and if none exist, the individual's usual residential address;
- (if the usual residential address is not in the UK) 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
- 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;
- the individual's date of birth;
- the nature of the individual's role in relation to the trust.
Deadlines for providing trust register information
The trustees of a taxable relevant trust must provide the trust register information on or before:-
- 31 January 2018; or
- 31 January after the tax year in which the trustees were first liable to pay UK taxes
Civil and criminal sanctions for non compliance
Civil and criminal sanctions may be applied against those in contravention of these requirements.
Civil sanctions will include penalties and statements of censure and officers of a trustee who are knowingly concerned in a contravention may be subject to the same sanctions as the trustee and may be prohibited from performing related management roles or functions.
Criminal sanctions for offences such as contravening a relevant requirement, prejudicing investigations, providing false or misleading information and disclosing information in contravention of a relevant requirement may result in imprisonment for up to two years, a fine, or both.
Disclaimer: This summary does not purport to be a comprehensive review or briefing on the subject matter. In all instances, specialist advice should be sought in relation to the interpretation, application and compliance with these legislative requirements.