Trusts? HMRC wants you...

Today I've been trying to use HMRC's new Trust Registration Service. In and of itself the process is laudable, and one hopes that it will bring great transparency to the UK where tax and trusts are concerned. Hopefully, it will also dispel the "Daily Mail" myth (other news publications are available) that trusts are only used by those seeking to avoid tax.

So, what did I think in practice when working through the new system:

1. For new trusts, it's pretty straightforward. However, we now require far more data for beneficiaries, including their dates of birth and NI numbers. So, there is a little bit of annoyance factor in having to go back to the clients and ask for details we've not been used to asking for before.
2. Existing trusts, however, are a nightmare, especially where the original inter vivos settlor has since passed away. Have you tried getting an NI number or a passport reference for someone who died several years ago? Families and advisers just haven't retained that data as it wasn't needed back then when the trusts were set up. There are also other questions being asked that the current trustees and/or advisers will simply not know the answers to if the trust is long established.

As I have said, HMRC launching the TRS is a laudable aim (which I believe has the best of intentions, although I do worry about how HMRC will use the data they collect). However, in practice, the information being asked for about existing trusts is in some cases simply not available. This prevents further progress with the registration of that trust, there is simply no option to bypass the requirement and file a part complete registration.

This will cause huge problems for agents and trustees trying to get this done by 31 January 2018, a problem that has been massively compounded by HMRC releasing the agent access months behind schedule but not extending the deadline for registration.

HMRC

I think we need a rethink on the deadline for this!