If you are a trustee who already uses an accountant or tax adviser to help prepare the trust’s tax return, it is likely that you would already let them know when there has been a significant change to or within the trust that might have an impact on its tax return.

Where there have not been any major changes in a year, it can be tempting to assume that all that you need to do to get the trust tax return right is to send your adviser the same set of information you provided last year.

But there are a number of less obvious changes which might have an impact, and our experience is that these are often missed or only come up fairly late in the tax return process. Here are some that we see most frequently:

  • Retirements and/or appointments of trustees, as these will need reporting on HMRC’s Trust Registration Service (TRS);
  • Changes to the details (such as the names or addresses) of settlors, trustees, beneficiaries and protectors, as these will again need reporting on the TRS;
  • Any deeds changing the terms of the trust, for example adding or removing beneficiaries, changing a beneficiary’s interest, or creating sub funds;
  • Discretionary distributions of income;
  • Appointments of capital to one or more beneficiaries;
  • Change in any investment manager’s mandate, as this may affect the FATCA/CRS status of the trust.
  • Acquisitions of any assets, particularly unquoted shares or chattels;
  • Disposals of assets. Capital Gains Tax (CGT) does not apply to all assets, and it can be easy to get caught out when you do dispose of an asset that falls within the regime. In addition, there is a requirement to report any disposals of UK residential property and pay CGT due within 30 days of the disposal date if the completion date was between 6 April 2020 and 26 October 2021 and within 60 days of disposal if the completion date was on or after 27 October 2021. This requirement does not apply where there would be no CGT charge. For more information on the 60 day reporting requirements, please click here.

If any of these apply to your trust, please make sure that you let your adviser know when you send them the information for this year’s tax return. This is not an exhaustive list – we would recommend that you tell your accountant or tax adviser of any changes, even if they seem to have no bearing on tax, so that they can advise you of any impact.

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