I have a non-taxable trust which has a historic UTR (last TR filed was 2008/09). No income since then. Not previously registered on TRS as its not taxable.
Now falls into the new rules to be registered as a non-taxable trust. But when I go to register this on TRS it asks for a UTR, which if I enter, registers it as a taxable trust. Anyone have any experience of what to do in this scenario?
Angie
If you are certain that there will never be any income or gains in the future then I would probably contact HMRC to get the trust taken out of self-assessment and the UTR cancelled. You will then be able to register the trust without a UTR as a non-taxpaying trust and obtain a URN.
regards
Maxine
Currently if a trust has a UTR it has to be registered as taxable, there is no current work around.
Although HMRC said they were going to introduce one.
Maxine - as far as I know HMRC will not cancel a UTR. But if you have managed this do let us know. thanks.
So law and HMRC practice is not made to fit reality but reality is made to fit law and HMRC practice. TS Eliot said (twice) âHuman kind cannot bear much realityâ and the clue is in the first word.
Jack Harper
Jack - to make an understatement, it is a mess. HMRC have not thought this through and now seem to just take the stance of âjust registerâ.
The lack of guidance from the professional bodies in these situations donât help.
In Issue 98 of Agent Update (which even I and Malcolm Finney are generously allowed to read) we have the novel TRS concept of a Discrepancy. TS Eliot has nothing to say about this chimera, though WB Yeats prophetically might have foreseen seen TRS when he wrote:
"And what rough beast, its hour come round at last,
Slouches towards [Somerset House] to be born?"
Jack Harper
This issue was raised on the HMRC Agent Forum some months ago. The reply provided by HMRC on 22.7.22 is as follows:
"We are aware that there are some trusts which have Unique Tax References (UTRs), but which in practice may not have had a tax liability for a long time, and have no reason to expect such a liability in future.
Trustees of trusts in this position, who havenât already registered on the Trust Registration Service, should now register if liable to do so.
When registering, trustees of such trusts should interpret the question within the Trust Registration Service asking whether their trust has a UTR as asking whether the trust has a UTR that is currently used to submit tax returns and pay any taxes due now or which are expected to be due in the next couple of years.
They should therefore answer ânoâ if the UTR is currently dormant and the trust is currently non-taxable. Gov.uk guidance and the TRSM will be updated to clarify that this is a legitimate interpretation of this question under these circumstances.
If a trust without a current tax liability of the sort described here has already registered using the historic/dormant UTR, no further action needs to be taken."
Jane Evans
Jane Evans Taxation Limited
Most helpful Jane, though I and others protest at selective publication by HMRC to closed groups.
Jack Harper
Thank you Jane. Incredibly frustrating for those of us who are persona non grata. It effectively means attempting to give tax advice with one or indeed both arms tied behind oneâs back.
Malcolm Finney
hadnât spotted that update Jane, thank you.
Terrible this is not then reported to the âpublicâ as Malcolm ad Jack point out.
HMRC Agent Forum claims to be available to members of professional bodies, although I cannot find a list of these. It ought to include Law Society / SRA / STEP but I donât know if it does.
I know that ICAEW / CIOT regularly ask HMRC to update their manuals when a clarification / new information is provided via the forum.
For practical points on the TRS, Helen Thornley at ATT is excellent:
I have tried to get into the Agent Forum a couple of times but canât even register/login. I sent an email to HMRC the other day saying I had tried password reset twice but couldnât get in. I havenât heard back yet.
The whole thing to me seems a bit Kafkaesque. Anything about updates / workarounds on the TRS should as others have said be published for all to see. Surely they would want that so people could get it right and also not be having to call HMRC helplines.
Sara Spencer | Trust Manager
Sara Spencer Ltd, 8 Kingsway, Harrogate, HG1 5NQ
07952 651881 | 01423 524114
Sara.spencer@trustandestate.co.uk
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I have every sympathy with the views expressed on this forum, but as someone who deals with HMRC on a daily basis I know that it is very difficult to get them to change their procedures. ATT provides an 8 page guide on how to join the HMRC agent forum. It is very useful, but it beggars belief that HMRCâs systems are so complicated that this is what is required. Thank you to ATT for your help.
What would be useful would be for some posters here to find out if HMRC recognises the Law Society / SRA / STEP as professional bodies for the Agent Forum. Then Sara would know whether it would be worth persevering.
Thanks Jane. I am however ATII (as well as STEP) so I presume I am allowed on.
I saw the guide but frankly couldnât be bothered to plough my way through it. The system seems to allow you to register then log on (albeit only to the Community forum at first). But I canât even do this. I will await their reply. It should take detailed instructions to do something so apparently simple. If they canât make it simple then I will just have to carry on using the information that they deign to make publicly available.
Sara Spencer | Trust Manager
Sara Spencer Ltd, 8 Kingsway, Harrogate, HG1 5NQ
07952 651881 | 01423 524114
Sara.spencer@trustandestate.co.uk
Privacy Notice - details of our legal basis for processing your information, retention period for data held, security of your data, your rights under the General Data Protection Regulations (GDPR) including the right to complain can be found in our full Privacy notice
This email and the information contained in it and in any attachments are confidential and may be privileged. If you have received this email in error please notify us immediately. If you are not the intended recipient, you are not authorized to, and must not use, disclose, copy, distribute, retain or rely on this email or any part of it.
Please note that whilst we try to ensure that attachments are virus-free, we cannot accept responsibility for situations where this is not the case.
Any information in this email is advice from the business and not the sender.
Sara Spencer Ltd is a company registered in England, registration number 12304408, registered office 8 Kingsway, Harrogate, HG1 5NQ
Latest from ICAEW on this:
Published on 27-Jul-2022 | United Kingdom
The Institute for Chartered Accountants in England and Wales (ICAEW) reported on 27 July 2022 that HMRC has provided clarification on the procedure for registering a non-taxable trust with its Trusts Registration Service (TRS) where the trust already has a unique taxpayer reference (UTR).
As part of the registration process, one of the questions posed is whether the trust has a UTR. This should be interpreted as asking whether the trust has a UTR that is currently used to submit tax returns and pay tax due now or which is expected to be due in the next couple of years. If the trust UTR is currently dormant and the trust is currently non-taxable, this question should be answered âNoâ. For trusts in this category without a current tax liability but which are already registered using the historic/dormant UTR, no further action needs to be taken.
HMRC says that it will update its guidance in the Trusts Registration Service Manual (TRSM) to clarify that this is a legitimate interpretation of this question in these circumstances.
ATT is generous in widely disseminating intelligence e.g. https://www.att.org.uk/uk-property-reporting-service-users-guide
The Law Society seems to just require registration while CIOT allows anyone to view its public submissions. ICAEW does so too but restricts its Tax Guides to those who pay an annual fee, modest for a professional. I appreciate that such bodies have a few paid officials engaged in these projects but much of the material is fed to them by unpaid practitioners especially those who give time to committees (Iâve been one). Some interest groups keep to themselves their trade secrets like some of my former partners used to lock up their precedents!
My main criticisms of this system are:
1 Where information about the tax system directly impacts taxpayers HMRC should make that totally public, promptly and accessibly, certainly to any type of adviser and even if the occasion for doing so reflects adversely on them e.g. they have been forced to backtrack.
2 Those contacting HMRC/HMG about anomalies and the like should be more robust in their denunciation of the obduracy of these monoliths e.g. the retort âshow us actual examplesâ which they know would impinge upon client confidentiality or simple taxpayer reluctance to look over the parapet or be seen to twist the tigerâs tail. Professional bodies should not self-censor themselves in making such contacts. I know all the excuses for that because I have heard them often and at first hand and they are basically about the tigerâs tail and either establishment cosiness or sheer funk. And sometimes the monolithic horses deserve to be frightened
Jack Harper
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What do they want to keep secret from âCustomersâ?"
Jack Harper