HMRC have confirmed they have updated the TRS to include the question: ‘Does the trust have a Schedule 3A data sharing exemption?’ HMRC have placed an update on the Agent Forum and asked trustees to return to the TRS as soon as possible to complete this additional question and keep their record up to date.
What is Schedule 3A?
This is a list of excluded trusts contained in legislation detailed in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. You can find the full list here.
Background to question
Certain express trusts are excluded from registration on the Trust Registration Service (TRS). However, even though a Schedule 3A exclusion may apply, if the trust subsequently acquires a liability to pay income tax or capital gains tax (CGT) and needs a Unique Taxpayer Reference (UTR), the trust will need to register on the TRS. In addition, if the trust incurs any of the other three taxes, i.e. inheritance tax (IHT), Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT), Land Transaction Tax (LTT) or Stamp Duty Reserve Tax (SDRT) which would bring it within the definition of a relevant taxable trust, the trust will need to register on the TRS.
The data sharing provisions that came into force on 1 September 2022, which allow third parties to request details of information held on the register in certain instances, do not apply to express trusts which fall within the list of trusts under Schedule 3A. This question has been added so that HMRC can identify such trusts to ensure that they are not subject to data sharing.
The additional question is to the benefit of affected trustees and their beneficiaries as it will maintain their confidentiality.
Other TRS updates
The TRS manual now states that because a premium bond purchased by an adult in the name of a minor does not create an express trust it is not registerable on the register.
National Savings Certificates purchased similarly are also outside of TRS registration, unless they have been specifically purchased by trustees of an express trust for a minor child.
It’s good to see more clarity added to the TRS and that HMRC are putting controls in place to maintain confidentiality where necessary.
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