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Trust registration service
Following my article on the trust registration service, ‘Approaching down the track’ (Taxation, 21 May 2020, page 8), a reader asked whether and how non-tax paying trusts could register and whether the process would be made easier.
There are actually two changes here:
- the new regulations following from the Fifth Money Laundering Directive (5MLD) which will expand the scope of the existing register to include non-tax paying trusts (unless they form part of the list of specific exclusions); and
- the upgrading of the existing system from an ‘iform’ to a new ‘microservice’.
The new regulations to expand the scope of the register are still progressing through parliament. I have not yet had the time to digest them properly, but a brief summary of the measures – and a list of new exclusions introduced since consultation – is available on the ICAEW website (tinyurl.com/y2demky8).
The new microservice launched in April 2020 for trusts subject to the existing 4MLD regime does not yet make provision for the effect of the 5MLD regulations so trusts within scope of the latter, but not the former, cannot yet register. Work to expand the microservice to cover the provisions of 5MLD will begin in the autumn.
The microservice can be accessed by either trustees directly, or they can appoint an agent to assist, and I expect that the same will be true when it is upgraded again to allow for reporting under 5MLD.
I agree that many of the trusts newly required to register under 5MLD will have little or no professional representation. Identifying these trusts and persuading the trustees to register will be a large challenge and the Association of Taxation Technicians (and others) have raised concerns about this in our responses to government consultations and directly with HMRC in meetings. However, I would be very surprised if significant changes are made to the existing, somewhat cumbersome, TRS processes. The best I can say is that a fairly reasonable penalty regime is being proposed for 5MLD, in which trusts that are identified as missing from the register will receive a notice to register and a period of grace to register themselves, rather than being hit immediately with a fine. I appreciate however that this may be rather cold comfort.
I will continue to work on the 5MLD regulations and how they affect trusts but, in the meantime, ATT members are largely battling with bringing the existing register up to date since the facility to do this was introduced in April. A brief guide on how to do this can be found on the ATT website at tinyurl.com/yx9omt6m.
Helen Thornley, ATT technical officer.
Capital gains tax reporting
After 40 years in tax advisory, I very nearly gave up defeated when I tried to report online a UK capital gains tax property disposal gain for my brother. There was a gain on sale and he had to report and pay the tax within 30 days of completion, but trying to do this has proved time consuming and difficult. One is sent from pillar to post and down many online blind alleys – it seems that only when emerging from this maze is it possible to see the path that should have been taken each time.
I foresee the issue of many interest and penalty notices (and taxpayer appeals won in court) similar to the problems that followed the introduction of reporting requirements for non-resident UK property disposals some years ago.
The problem here is that not everyone has a ‘pet tax adviser’ on hand to take them through the maze at no cost and I fear for the man in the street in terms of costs, interest and penalties. If I was a cynic, I would say that the non-resident UK property disposal regime proved ‘a nice little earner’ in the past. I am of course wrong; it is the 30-day reporting system that is unduly complicated when in fact a full self-assessment capital gains tax return has to be made later anyway.
Jon Golding.
