TRS Guidance - Record keeping for non-resident trusts

Page 26 poses the Q&A:

Do trustees of all non-UK resident express trusts that have UK assets or UK source income irrespective of whether they have incurred a liability to pay any of the relevant UK taxes in a given tax year need to maintain accurate and up to date written records under regulation 44(1)?
Yes. We would expect the trustees to maintain accurate and up to date written records of all the actual and potential beneficial owners of the trust as set out under regulation 44(1) of the legislation.

I would expect all professional offshore trustees will have to keep most of the data anyway under local law but this appears to ignore the wording of the Regulations. The obligations only apply to a “relevant trust”, defined in 42(2)(b) as:

"(ii) a non-UK trust which is an express trust; and
(aa) receives income from a source in the United Kingdom; or
(bb) has assets in the United Kingdom,
on which it is liable to pay one or more of the taxes referred to in regulation 45(14);

The guidance appears to be completely ignoring the final sentence even though it is referred to in the question.

Am I missing something or are HMRC reinterpreting their wishes as legal obligations in the guidance?

Andrew Goodman
Osborne Clarke LLP

I must confess to a headache trying to follow the morass of stuff emanating from HMRC and then seeking to follow the useful discussions on the TDF albeit with difficulty.

I agree with Andrew’s comment regarding contradictory statements.

At the end of the page 26 Q & A it also states:

This information should be held because under the legislation any law enforcement authority can request information about the beneficial owners of the trust including from a trust which does not incur a liability to any of the relevant UK taxes.

But again the Regs state this only applies to “relevant trusts”.

Malcolm Finney

The point is that HMRC have been watching the wall as the OECD went by.
The fact that the terms “Beneficial Owners of a Trust” and the more recent, but non statutory idiom of “Equitable Interest”, I quote, of an entirely disinterested Settlor have come into the declaratory equation means that HMRC are risking a breach of the constitutional common law duty of confidentiality, see Ingenious, by assembling and giving out “information” that is not legally accurate and can be abused. There may be a common law duty in releasing information to see that it is not only fit for CRS purposes, but also does not misrepresent the legal or equitable or fiscal position either. I am not certain that the Statutory instrumentation upon which the implementation of the CRS framework is based is adequate to exclude their fundamental common law duties of confidentiality.
The use of the information by foreign states in a legally balanced context is one thing, however when irrebuttable fiscal presumptions of deemed ownership ownership in foreign tax systems such as the French come into play, then the dexterious reference to “any law enforcement agency” not just tax administrations becomes entirely sinister.
The notion of “avoidance” is sinister, as any attempt made to legally rebut a supposedly irrebuttable presumption of property allocation will now be considered évasion. even where there is no economic ownership, dominion or quasi-possessory control involved
I am using the French term, as that is the process being deployed at the OECD by its current French Marshals

Peter Harris

A relevant trust is defined as described, but only becomes a taxable relevant trust ‘in any year in which its trustees are liable to pay’ [any of the six taxes mentioned at regulation 45(14)]. Until then, I think the intention is that the trustees should maintain the records referred to in regulation 44(1). I agree that the wording could be clearer, but otherwise one would expect regulation 44(1) to refer to taxable relevant trusts.

Ray Magill


I agree that onshore trusts are required to collate and keep the information irrespective of tax liability but the obligation only applies to offshore trusts if they are liable to pay UK tax on UK assets/income.

The definitions are poorly drafted in that (so far as I can tell) an offshore “relevant trust” will always be a “taxable relevant trust” because the taxable part is built into the “relevant trust” definition for non-UK trusts.

An offshore trustee may wish to collect the info anyway but could alternatively choose to avoid any investments in the UK (while also fulfilling their local KYC / CRS / FATCA requirements).

Andrew Goodman
Osborne Clarke LLP