Trustees (lay individuals) failed to register a Life Interest Trust at TRS. The Life Interest Trust has now come to an end on the death of the Life Tenant. Should they still register the Trust now then subsequently close the Trust? I am hoping that they will not receive a penalty or fine.
I just wanted to see if anyone else had any experience of this.
Thank you.
I think this is a fairly common occurrence, and indeed, I am dealing with an identical situation where following the death of the life tenant, the remaindermen have become absolutely entitled to the property. As the trustees are now holding it in trust for the remaindermen it is in my view necessary to register the trust. As the life tenant has died, it would seem to me that as he/she is not currently a beneficiary of the trust and the only beneficiaries are the remaindermen.
I would be surprised if HMRC would charge a penalty in this situation Once the Property has been transferred to the beneficiaries, it will then be necessary for the registration to be cancelled. If, of course, there is a tax liability in the trust, a UTR will need to be obtained.
Personally, I think it is all a bit pointless going through the registration process if there is no tax involved, but that seems to be what is required unless I have totally misunderstood the rules.
Patrick Moroney
The exact same position has cropped up today and on many previous occasions and I agree your view, Patrick,
Thank you both. Very helpful.