Accounting treatment of costs for trust registration.


(Jeremy Crouch) #1

Having got through the job of registering trusts with the Trust Registration Service and raising bills for this, my mind has turned to the treatment of those fees in the annual accounts. I am inclined to see the registration as being an obligation on the trustees due to the fact that there is a trust and so a capital cost. Has anyone else considered this as yet?

Jeremy Crouch
Clintons


(Simon Leney) #2

I take the view that its a capital cost too. My reasoning is that trustee costs are capital costs unless EXCLUSIVELY attributable to income. The registration is for the purpose of annual income AND capital gains tax returns.
Simon Leney
Cripps LLP


(Lucy Orrow) #3

I hadn’t thought about it but will be interested in others opinions. We charged a fee for the registration this year but intend to include the annual review costs in their normal fees for preparing accounts and tax return. I can see why the initial cost might therefore be capital.

Lucy Orrow
Lambert Chapman LLP


#4

I have.

I have based my apportionment based on why the trust needed to be registered in the first place. I mainly deal with offshore trusts. So this is in relation to offshore trusts.

i.e. I registerted a trust which is a capital trust i.e. distributes capital only. The only tax charge for the trustees is IHT exit charges and 10 year charge. In this case , the registration is clearly capital.

For other trusts that only have income tax liability i.e. tax on UK source income, then this will be an income charge.

For trusts that have both income and capital gains tax charges, maybe divide equally between income and capital?

Sameera Nathoo

besttax.co.uk