Maintaining a Registered Trust

  1. A new Trust containing 6-7 Investment Funds were registered with HMRC last year.
  2. This Trust was re-registered with HMRC using the new online Service in 2017 when it came to completing a self assessment Tax return for Trust for 2016-2017 tax year
    3.This Tax year I have needed to ‘swop’ some investment Funds within Trust - NO INCOME taken.
    4.There used to be a Paper form to maintain the Trust contents registered with HMRC BUT online registering does not seem to have such a function

Does anyone have any idea how to maintain these Trusts once registered?

Lawrence McCaffery

HMRC says – write them a letter

Julian Cohen, Solicitor

Why do you think you should advise HMRC, if it is just a change in the trust’s investments?

Ray Magill

The site seems to require you to continually update the assets of the trust – I don’t know why. It’s not in the regulations.

Julian Cohen, Solicitor

Changes cannot be made to existing or new registered trusts at this time. The system is not ready for this. As Julian states, you will need to write in.

Lucy Orrrow
Lambert Chapman LLp

Might one “reason” for it be that a continuous updating of the assets held would enable automatic information exchange with the French, and others, to fit their annual declarations and legislations?

Inter governmental / executive cooperation at this level might need to be spelt out in the Regulation to avoid overtly breaching basic common law principles of privacy and confidentiality…

Peter Harris
Overseas Chambers

…Not to mention Data Protection. It seems to me it might well be a breach of the DPA if information supplied by trustees to their solicitors for the purposes of administration of the trust were supplied to the government of another country so they might levy tax on a beneficiary.

Julian Cohen, Solicitor

One problem is that HMRC’s system doesn’t comply with the Regulations. They
require trustees to supply specific information to HMRC, without saying
that the information must be supplied online. That is HMRC’s suggestion, but
can it be anything more than a suggestion?

The Regulations only require ‘a statement of accounts for the trust,
describing the trust assets and identifying the value of each category of the
trust assets at the date on which the information is first provided to the
Commissioners (including the address of any property held by the trust’
[regulation 45(5)©].

Regulation 45(9)(a) says that the trustees must advise HMRC if there is any
change to the information previously provided (of beneficiaries etc),
other than any change in the value of trust assets.

Regulation 45(9(b) says that the trustees must confirm to HMRC that they
are not aware of any change to the information provided under regulation
45(2). As changes in the value of trust assets are not excluded, it seems to
follow that if there is a change in their value, no such confirmation can be

Ray Magill

I note that Regulation 45(4) says that the information must be provided in such form as the Commissioners reasonably require. That seems to answer the question whether trustees must supply information online or not (provided it is reasonable),

Julian Cohen, Solicitor

Great care needs to be taken here, in that for example, certain accountants in the United Kingdom fell into the trap of thinking that because they were required to declare all assets to the equivalent French register of trusts, that automatically rendered any changes in the trust assets assessable to capital gains in France, and forced certain French firms to declare these as capital gains of the beneficiaries in France.

They forgot that, for these gains to be chargeable, there needed to be a French taxing provision which allocated the gain not to the trustees, where the liability still lies and remains under the French legislation, but by a deeming process to the French resident settlor or beneficiary. There is no such deeming provision in the French tax code and the equivalent “connected person” definition only applies to close family individuals, not trustees. The only deeming provisions in the French Tax Code are in the Wealth Succession and Gift duty areas, and to a very limited extent in income tax, not CGT.

I do not think that this will represent a problem to the English professions, but it might start giving foreign and “offshore” firms doubts as to what they are required to declare as a result of this information being on the register, where they are to declare the matters other that the UK, how any such declaration is to be made and for whom.

Peter Harris

Given the information which is to be made available on the Register, to our foreign friends, one has to prepare oneself for an onslaught of trust anti-avoidance and deeming provisions being introduced abroad in addition to their legislations in place, by jurisdictions seeking to encroach upon what is technically a UK taxing jurisdiction and, which should remain so. Certainly post-Brexit

The concept of “dominion” as a form of retained possessory concept of ownership has been bandied about in Switzerland in divorce cases in relation to settlors, with or without reserved powers. That might be a convenient deeming hook for a foreign jurisdiction to abusively hang the information available on the HMRC database.

The next stage on the OECD agenda is the inter jurisdictional attiribution of assets and the rights to tax them by reference to OECD principles, such as residence, but not to the legal points that define them.

Hence the over insistence upon information as to settlors, protectors, legal / tax advisers etc.

What is clear is that each trustee will now have to keep very careful records of what has been declared to HMRC and when, so as to be able to defend themselves against claims from beneficiaries or settlors, and what is more to be able to explain to foreign tax administrations exactly what has been declared, and what might be an unwarranted assumption by the foreign observer.

Whilst for the moment there is a degree of confidentiality whether at common law or otherwise expected from HMRC, that duty will not extend as its stands to other tax administrations who might not care less about who might receive the information, and who may even be able to hide behind statutory defences to release the information and not be liable for so doing.

Note that for example, the French tax administration can freely exchange or swap information obtained with other parts of the Government administration which may not be bound by duties of confidentiality,

The information registered means one or more things here. It may bear entirely different “meanings” once in the system.

For example, the specific naming of members of a discretionary class, despite the fact that they may have no hope of any benefit in the future, could lead a French tax inspector hanging the fiscal albatross of the entire trust fund around the neck of an unfortunate French resident member of that class. Whilst that application of the law was technically unconstitutional under basic French constitutional theory, no French politician took up that cudgel when the 2011 legislation went through for fear of being consigned to oblivion in the next election. and it is only recently that a Parisian firm has started to erode the current administrative approach on its unconstitutionality

That is why the Forum’s and HMRC’s approach to open and closed discretionary classes is of fundamental importance, and will necessarily entail a rethinking of the drafting of many discretionary classes.

Peter Harris

Peter, you yourself have pointed out that the new rules on disclosure are one thing: but that there has not necessarily been any tax charge that follows such disclosure.

Why, then, should advisors be concerned if the actuality of a discretionary class with beneficiaries who do not stand to benefit is disclosed to other jurisdictions? If there is no benefit there is no likelihood of attribution of assets. And if the only way to preserve these beneficiaries from a tax charge is by concealing their identity that does not seem to me a very satisfactory way forward.

Julian Cohen, Solicitor


The French can tax beneficiaries to wealth tax and to succession duty on a deeming basis irrespective of any real benefit received, as do others.

Hence my warning as to the definition of open and closed classes.

Peter Harris