HMRC published the December 2017 Trusts and Estates newsletter as an early Christmas present on 22 December. In case you missed it here is a summary of the contents.
Trust registration service
There is of course an update on the trust registration service (TRS) but nothing beyond articles already published on our website, our latest article was on 18 December giving HMRC’s confirmation that a filing after 31 January 2018 but by 5 March will not be liable to a penalty nor will it be treated as a late return. The newsletter does give a handy summary of the information required for the TRS but the FAQs published on 22 November 2017 have more detailed information.
The newsletter advises that the new inheritance tax (IHT) Disclosure of Tax Avoidance Scheme (DOTAS) rules come into effect from 1 April 2018 and that guidance will be published in advance of the effective date. We have been working with HMRC on the formulation of the new rules and will be working with them on the guidance.
Filing for trusts with small amounts of savings income
The current arrangement – whereby trusts and estates which only have income in the form of savings income do not have to file a return if the tax liability on the income is less than £100 – will be extended to 2017/18 and 2018/19. Perhaps a long-term solution will be considered in the consultation announced in the Budget speech by the Chancellor on how to make the taxation of trusts simpler, fairer and more transparent. We have had previous consultations on the same topic but so far no solution has been found. The consultation will be published in 2018.
The newsletter reminds agents of the toolkits available to help them when completing trust tax returns which they say are particularly useful for those agents who only complete a few such returns.
New rules for non-doms
Finally, there is a reminder of the new rules regarding non UK domiciled individuals which came into effect from 6 April 2017 despite not being introduced into legislation until Finance (No 2) Act (which received Royal Assent on 16 November 2017). The key change is that non UK domiciliaries are now deemed domiciled for all taxes if they have been resident for 15 out of the last 20 years. This has an impact for IHT, where the rule was previously 17 out of 20 years for deemed domicile status, and for trusts, beneficiaries and settlors now deemed domiciled in the UK.