Trusts are a useful means of preserving wealth. They allow assets to be passed down through the generations in a secure and tax efficient manner.
Trusts are flexible as they can include a range of assets, including both existing family owned assets (such as properties or company shares) or newly acquired investments. Also, they are a good way of providing funds for future generations, such as the payment of school or university fees for grandchildren.
If used correctly, this can be a useful tool for inheritance tax planning.
Global Reporting Requirements
There’s been significant changes in global reporting standards in recent years impacting trusts that hold financial investments as their main assets. The reporting requirements under FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) have become fairly onerous and hard to navigate for the non-tax technical person, so it does make sense to get an expert to help you out.
Registration of Trusts with HMRC
Another area of change is in the process of registering trusts with HMRC. Trusts can no longer be registered with HMRC using paper forms as they were in the past. An electronic registration process, known as the Trusts and Estates Registration Service, provides a single online access for trusts and estates to comply with their registration obligations.
- no more forms lost or delayed in the post
- only having to answer questions relevant to that particular trust type or estate
- the ability to print out a summary page for the trustees to keep for your own records
Launched on 10 July 2017, this online service allows lead and corporate trustees to build on existing tax reporting mechanisms.
All trusts with a UK tax consequence will need to be registered. Also it will be the trustees’ responsibility to ensure the Trust Register is accurate and up to date. This will also include trusts which were originally registered with HMRC under the old system.
As a result, Trusts remain one of the most versatile tax options for business or private asset owners. If you are looking to manage wealth for future generations, this investment option should always be considered.
Need our help?
If you would like to discuss any of the issues raised in this blog, please contact Stephen Pointer.
Post by Stephen Pointer