Has anyone needed to register a Life Interest Trust for AEOI where the investment income is mandated directly to a beneficiary? Is there any ‘exemption’ available for trusts where the trustees do not receive the income directly and are therefore not completing annual tax returns for the trust?
I know only a little about this but ATT have done a good article.
This test asks whether 50% or more of the trust’s income comes from investments and the trust has a discretionary fund manager.
I think you have to look at the trust itself. I do believe that the mandating of income is relevant.
Lucy Orrow CTA TEP
I haven’t seen anything suggesting that mandating would make a difference for AEOI purposes. The definition of an FI is contained in FATCA and CRS, which are a US law and international agreement respectively so it seems unlikely that a UK tax specific rule (mandating) would be a factor.
An exception to the rule for IIP trusts would seem to run counter to the whole purpose of the AEOI regime, which (here) would be to flag up IIP beneficiaries to their home tax authorities. (I appreciate that this purpose is a pointless one when everybody concerned is actually in the UK).
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I am in the wrong office to look it up but my understanding was there was a cutoff date in that I have one that was triggered in July 2011 where the income from a commercial rental goes direct to the sole beneficiary not via the trust that only holds the capital asset and has no income and it was confirmed about a year ago the trust does not need to be registered. I registered it in 2011 then HMRC said stop the annual returns and have checked twice since. My question on this one is the beneficiary wants out of the Trust at age 85 but I am not aware of anyway that can be easily done without a trigger on CGT or IHT?
Simon, you should set up a new question for this. it is not relevant for AEOI discussion point.