Hi. I trying to find a definitive answer as to whether a Nil Rate Band Trust in a Will is considered a registerable trust on the TRS and, if it is, whether the issuing of a promissory note negates the need for the Nil Rate Band Trust to be registered. I have found lots of information on the web but it is all conflicting!
It is undoubtedly registrable as an express trust in principle whatever the nature of its trust property. There are weaselly wiseacre arguments as to the appropriate timing given the exclusion for a nontaxable will trust for 2 years after death. In essence a will trust does not subsist at all until it becomes completely constituted by its destined trust property ceasing to be needed for due administration by, which may occur later than the 2 years.
There is also an argument that the settled property comprises a chose in action from the moment of death; although its value may be debatable that is of no matter for TRS. HMRC are unlikely to run such a sophisticated argument.
Given the tenuous grip of HMRC on the law of succession and their ignorance of or refusal to apply their own position in TSEM6045 the safest course of action is to assume that 2 years is a maximum period for delaying registration, even if the AP has not ended by then and there has been no assent express or implied by the PRs to the trustees or to themselves if they are such. The possible penalty for an out of time registration is scarcely worth risking if the trust will need to be registered eventually: TRSM80020.
I imagine that HMRC are not likely to run the argument (strictly possible as a matter of law) that the registration within the 2 year period should have been made within 90 days of an earlier assent or factual end of the AP. Especially since the PRs’ judgment on when that occurs is difficult for HMRC to contradict, so rarely disputed, and not the best use of their time to do so.
Jack Harper