Another TRS enquiry

A question has been raised with me in relation to who the Settlor is when completing the registration where the trust has arisen as a result of a DOV. As we know for IHT and CGT purposes it is the deceased but it has been put to me that for TRS, it is the beneficiary who has redirected his interest.I should be glad to have members comments.

Patrick Moroney

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Where a trust has been created by a Deed of Variation, according to The Association of Taxation Technicians and CIOT (albeit in 2018), each person who took less under the deed than they would have done under the will is a settlor of the amount given up and should be disclosed on the register as a settlor.
Where property which would have been settled in trust on the death of the deceased is now comprised in this settlement the deceased should also be included on the register as a settlor.

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That is very helpful Francesca but it’s a pity that guidance like this is not provided by HMRC. I don’t recall seeing anything about this from STEP but maybe I missed it. I suppose if one looks at it logically and with money laundering in mind, HMRC are only interested in living settlors.

Patrick Moroney

If you take a look at “TSEM1815 - Introduction to trusts: supplementary deeds deed of variation or family arrangement” it states:
" The settlor of a trust created by a deed is not the deceased, unless it’s a disclaimer ([TSEM1840].
It is the person who was entitled to the gift that has now gone into trust. The gift can be capital or income or both. The case of Marshall v Kerr (67 TC 56) is relevant. There may be more than one settlor."

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The information also appears on the ATT website. As I have commented previously, it is inequitable for tax information to be made available to the so-called privileged few, namely, the professional organisations [eg CIOT; ATT etc] without it at the same time being made available to the general public.

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Marshall v Kerr referred to on HMRC’s website was superseded by legislation for CGT purposes; see TCGA 1992 s 68C introduced byFA 2006.

Malcolm Finney