Registering an IPDI trust

Dear all,

I have a matter where W died, leaving an IPDI in the marital home to H who continues to reside in it I rang HMRC to look into registering the trust, but HMRC’s answerphone message stated that trusts only needed to registered if income was earned by them. All the up to date advice I have received from conferences I have attended is that such trusts should be registered even if no income is earned.

May I ask, are practitioners currently registering such trusts?

Many thanks,

Claire Carr
Rexton Law LLP

I haven’t registered any under the new rules but they came into force in October so you “should” be able to. HMRC don’t appear to have updated any guidance yet so they may just be ignoring it for now.

From memory, there are no particular questions that you couldn’t answer now, the problem is you may well receive a self-assessment return in due course, on the assumption the trust must be taxable. This may or may not be fixed once HMRC have actually considered the new rules themselves.

Overall, I would have thought it better to sort it now while it is fresh in your mind and that of your clients.

Andrew Goodman
Osborne Clarke LLP

Dear Claire,

The deadline for registering trusts that do not have a tax liability is currently set as 31 March 2022.

HMRC have advised that they do not expect the software to be updated to allow the registration of such trusts before 31 March 2021.

Currently, only trusts that have a tax liability and/or require a trust return are able to be reported on the trust register.

I hope that this gives you some clarity.

Lucy Orrow CTA TEP
Lambert Chapman LLP

We register the existence of the Will Trust at HMLR using an RX1 and remove the deceased from the title (if a proprietor) using DJP.

Iain Cameron
Acer Legal

We run a trust admin team and I am reliably informed by my colleague that it is not yet possible to register dormant trusts. Presumably this will change soon as it will be a legal requirement by 2022!

Camilla Bishop
DMH Stallard

I’ve found the same issue. Guidance states needs registering if liable to income tax, IHT, CGT or any other tax but when you start to fill in the online registration it only allows for cases where income tax due and you need a UTR issuing. My conversation with HMRC (the officer went off to get guidance from further up the chain and rang back) resulted in a suggestion to send the IHT forms we were filing with a cover letter stating above conflicting guidance and stating that we had therefore not completed the online registration and requesting HMRC response. The officer in the call advised that HMRC can initiate the registration process their end if need be. I also referred to this in my letter. No reply so far to letter although we have had the IHT calculations so forms have been processed.

Juliet Field
BRC Accountants LLP

Dear Claire,

I have had the same issue. Having re-read August’s HMRC Trusts and Estates newsletter, it advises that “it is not yet possible to register non-taxpaying trusts on Trust Registration Service. The government is in the process of updating the Trust Registration Service IT system to accommodate the new requirements set out within the regulations. We will provide guidance about when and how trustees will be able to register in due course. Trustees will then have until 10 March 2022 to comply with this requirement.”

Will be interested to see when this does take place, but I do not think it has happened yet - I did try to register a non-taxpaying Trust last week to no avail.

Kind regards,

Amy Turner-Ives
Whitehead Monckton

You are correct and there is a date set for 2022 to register qualifying trusts. However on a recent webinar with Lesley King, Lesley mentioned that even though the trust you are dealing with is one that would be needed to be registered, HMRC currently do not have a way to register non-income producing trust. Lesley said HMRC will most likely be announcing when they release the facility to do so. The Trusts and Estates News Letter from HMRC should cover when this happens.

Ben Schofield
Co-op Legal Services

If a Settlor creates a life interest trust during their lifetime and the trust only includes their residence is there currently a requirement to register the trust? The trust will not receive any income. If registration is required do HMRC have the facility in place yet to register the trust?

Hi Gary,

Please see my message from earlier today about registering non-taxable trusts. this system will be available from next month and life interest trusts of your sort will be reportable.

Lucy Orrow CTA TEP
Lambert Chapman LLP

Thank you Lucy.
For some reason I can’t see your earlier post today.

The TDF has some technical problems. I don’t know what they are and I certain can’t solve them.

oh that’s strange. It’s called non-taxable trusts. If you can access HMRC Agent Update issue 87, it has more details about the introduction of the new system.

Lucy Orrow

I’ve followed the link and it seems clear that if the financial criteria are met by an estate, the estate must be registered with the Estates Registration Service.

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I would agree. I have registered some Estates already and it’s very similar to the TRS but with slightly different questions. I can assist if you have any questions.

Lucy Orrow