27 Feb 2018

No knight in shining armour for trust agents in distress

gill-steel

Those of you acting as agents for trustees will have had a horrid time. Never mind the usual scramble to get your Trusts & Estates Tax Returns for 2016/17 in to HMRC by 31 January 2018 and pay any tax, you have had to grapple with the Trust Registration Service (TRS).

Iterative process of software design

When a new software system is launched these days it seems the users have to break it in and suffer the problems the glitches and unforeseen issues generated whilst still attempting to comply. The TRS is one tiny part of Making Tax Digital (MTD) so one wonders what will happen when mainstream tax data has to be filed digitally.

The pain of being the guinea pigs is obvious – many firms had multiple trusts to register by a set deadline which usually is:

  • For new trusts and complex estates – 5 October following the end of the tax year in which a tax liability arose
  • For existing trusts – 31 January following the end of the tax year was said to be fair

In the event the 5 October 2017 deadline was pushed back to 5 January 2018 but this deadline still left many solicitors, in particular, unable to register.

The registration date for existing trusts (i.e. ones already reported to HMRC under the old paper system of Form 41G) was pushed back to 5 March 2018.

Problems

HMRC announced on 20 December 2017 that where new trusts needed to be registered by 5 January 2018 by digitally excluded agents they would accept a paper registration and asked practitioners to request (via the trust and estate helpline on 0300 123 1072) a ‘data capture sheet’. Some firms did not receive this in time to submit registrations of new trusts and complex estates by 5 January 2018. On 4 January 2018 HMRC conceded that those who had failed to register online could continue to use the data capture sheet until the matter was resolved.

On 8 January 2018 HMRC said the problem had been resolved and any agent who had previously had problems should try again. The problems still seem to exist if you have never had an agent code before or you have never acted as an agent before. You will still need to use the data capture form which will eventually result in you receiving a Unique Tax Payer’s reference (UTR).

If you are in this situation contact the helpline again and wait for the UTR. You have three months from the date of receiving a notice to file (which accompanies the UTR) in which to submit your return without a filing penalty.

For those of you trying to get all your existing trusts registered please make sure you read the updated Frequently Asked Questions (you can find them here: https://ion.icaew.com/taxfaculty/b/weblog/posts/trust-registration-service-more-guidance-from-hmrc) for various work arounds and amended pieces of advice – in particular what to do with classes of beneficiaries.

I hope you manage to make it work. Make sure you complain if not. Let me know how you get on.

Trusts are a muddle

If you need help with aspects of your Trust administration – training, mentoring or simply advising while you get to grips with the intricacies of Trusts – you will find LawSkills are specialists in supporting Private Client practitioners. If you’ve found this article interesting and would like to see more, why not subscribe to the monthly LawSkills newsletter? It will help you stay up-to-date with recent cases, opinion and helpful topics to assist your Private Client practice.

Gill Steel

Director, LawSkills Ltd.

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