What is the general awareness of TDF subscribers in connection with the relatively new HMRC requirement for any trust with discretionary managed investment portfolios that comprise 50%+ of their income to register for AEOI with HMRC by 31 December 2025 or face penalties for non-compliance?
Does anyone know what perceived mischief HMRC are seeking to address by this and what is the point since such trusts should already be registered on the trust register and will also probably have LEIs, especially since after having registered they will generally not have to make any AEOI returns (or they would already be registered)?
Does anyone know why tax agents appear to have been completely excluded from this exercise?
I will also be very interested to hear from others about this and how to do it?
I tried to use the Government Gateway account for one of my trusts to do this, but it didnât allow me to register for AEOI?
When I spoke to someone at HMRC about this, they were rather vague and suggested I would need a separate Government Gateway account to register for this but couldnât really help much more than that?
yes you will need a separate government gateway account that is as an organisation (Business Account) as a trustee and authorised tax agents are unable to do this for their clients
Like Maxine I do not see the mischief and I feel this may well have slipped under the radar as we were only made aware of it recently but I know one broker who has written to trustees so I expect it will be well known soon!
I have registered a trust under AEOI in the past but I have a feeling we could not do it as agent so we had to do it as a trustee which in this was ok as the lead trustee was partner of the firm. I have not looked to see if the position has changed. Will the GGA used by the trustees to claim the trust for TRS be ok or will a separate GGA be needed?
Perhaps important to note in passing that this fits squarely within HMRCâs implementation of the EUâs and OECDâs general information exchange framework, with the Trust being treated and recast as a form of Unidentifiable Fiscal Object (i.e. a âlegalâish entity) not the Trustee.
It is worth bearing in mind the approach and words of Rowlatt J in Garland v. Archer-Shee 15 TC 693 at Page 711 which have been generally followed through to Memec and beyond.
âNow I have a statement of the American law found by the Commissioners. I agree with Mr. Hills that it is not a question of American law whether something is or is not within the Income Tax Acts. The question of the American law is, what are exactly the rights and duties of the parties under an American trust, and when you find what those rights and duties are, you see what category they come in, and the place they fill in the scheme of the English Income Tax Acts which the Courts here must construe.â
Trusting that a foreign administration would adopt the same principle in determining what the legal and fiscal content of an English UFO such as a trust of movables or of immovables could be over-optimistic âŚ
Like you Maxine I feel like this has been completely under informed to agents and yet again HMRC are excluding us from being able to easily register for the client.
We are now scrambling to understand the rules as the description online is somewhat confusing - Can you confirm where the wording you have included above is found as the government guidance. I have also seen wording (not on a HMRC website) that suggests TDT are only caught if it has a âreporting FIâ as a trustee (such as a corporate trustee) and that trustee reports on behalf of the trusts it manages. If this is correct this would reduce a number of the Trusts we need to register. Does anyone have a definitive link to HMRC guidance on when a TDT has to register including the exemptions - the only one I can find does not include the exemptions above.
Thank you Andrew that is helpful. The wording in the STEP guidance
Following the change in the rules, all trusts that are reporting financial institutions or trustee-documented trusts that do not have any reportable accounts for CRS purposes, Page 4 of 5 or US-reportable accounts for FATCA purposes must now register for HMRCâs AEOI service.
suggests that even if a Trust is not an FI then it is caught as a trustee documented trust and pretty much all trusts need to register.
I donât think that is the case as a TDT is one which has an FI as a trustee (eg corporate trustee) where that trustee is dealing with the reporting on behalf of the trust
What is exercising my brain on this is the line in the STEP guidance where it says â A trust will satisfy the âmanaged byâ test if the trust investments are managed either by a professional trustee in the course of its businessâŚâ.
As a solicitor trustee I am a âprofessionalâ. If I have investments in a trust where there is no discretionary management in place am I managing those investments and therefore cause the need for that trust to be registered for AEOI purposes?
I thought this wording referred to âcorporate trusteesâ only, but now Iâm second guessing/overthinking.
Nigel, I believe it is wider than that. A Trust can be caught within the normal FI rules where a FI is a corporate trustee but a Trust is also caught if it doesnât have a corporate trustee but has a portfolio which is discretionary managed and more than 50% of its income comes from the portfolio. EBTâs are also caught within specific rules and FICâs are caught under the same rules as Trusts where they have a discretionary managed portfolio.
For other info - STEP and other organisations have asked HMRC for a light touch on the penalties which would otherwise be ÂŁ1,000 plus daily penalties. HMRC have confirmed that a reasonable excuse will be accepted but if the definition of reasonable excuse is the same as for tax returns that is very limited in scope.
Iâm reading that agents can âbulk registerâ up to 250 trusts in one go and that there is then a 24 hour lock out of the system. As a tax agent, I havenât found a way to log into the registration portal, neither of my logins work and I canât find any guidance on how agents can do it! Have you had any luck?
The only way I can get to the page allowing the bulk 250 registrations that the guidance says agents can do is via my firmâs own HMRC Government Gateway account. There is nothing on the firmâs HMRC agent account to allow access to this page.
It is an old fashioned page with boxes to complete with the trust information required and then I would need to select who I am - I cannot see agent there at all. Trustee is an option.
I am asking a portfolio manager and an IFA to see if there is more knowledge out there!
You are not able to set up an AOEI account as an âagentâ but you can set up an organisation account as a FI (so just tick no when it asks if you are an agent) and call it the name of your agency and then you can register other FIs under your account, as noted â we have used this system for actual CRS reporting for our trust clients since it was first introduced, so I donât see why it could not also be used to register ânon-reporting â trusts too.
Thank you for your useful advice, I was not sure who you were replying to so can I jump in to ask the following:
I think the account you use is what I am looking at as it is my organisation account. What do you select to say who you are? Options are PFFI, RDC FFI, direct reporting NFFE, sponsoring entity of a sponsored FFI or of a direct reporting NFFE, trustee or withholding agent.
Itâs quite a while ago now that I set it up so I canât remember exactly, but as with all these ânewâ HMRC specialist portals (e.g. ATED) that all appear to have the same set up, landing and login page, itâs where you start that is important since the âback endâ is different in each case. It may have been direct reporting NFFE but I canât be sure, sorry.
Jumping in here quite quickly just to say that I donât think any selection with âNFFEâ in it can be the correct one, just because (so far as I can gather from the guidance) an NFFE wouldnât be registrable. Is there any reason not to use the âtrusteeâ option?
Thank you both. Those options appear at the end of the page that is completed for the trust that is being registered so it applies to the individual trust in question. We are looking to complete them as agent, so I canât see any of those options applying but on the other hand, the guidance suggests agents can bulk complete 250 a day. Perhaps they mean withholding agents can do this, not accountants, I donât know.