Trusts and Estates What’s New? September 2021

HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.

Trust Registration Service (TRS)

The TRS is now open for non-taxable trust registrations.

Trustees should now register all UK express trusts and some non-UK express trusts with HMRC including non-taxable trusts unless the trust is specifically excluded. The new deadlines are as follows.

• Non-taxable trusts in existence on or after 6 October 2020 must register by 1 September 2022.
• Non-taxable trusts created after 1 September 2022 must register within 90 days.
• Changes to the trust details or circumstances must be made within 90 days of the change.

See Trust Registration Service

Inheritance Tax Checker launched

HMRC have updated their guidance about valuing the estate of someone who’s died to include an Inheritance Tax (IHT) checker which:

• Gives the user an estimate of the estate value for Inheritance Tax purposes.
• Helps the user decide what they need to do next based on that estimate.

It does not calculate any IHT due on the estate or inform HMRC about the estate’s final value.

See HMRC tool: Check if you might need to pay Inheritance Tax

New telephone number for the Estate Period of Administration Helpline

• The new telephone number for the Estate Period of Administration Helpline is 0300 123 1071. This is for advice where the estate is complex and must be registered with HMRC.
• The telephone number for help and advice on IHT, Probate and Trusts is 0300 123 1072.

Administration period of Deceased’s Estates for Income Tax and Capital Gains Tax (CGT)

If an estate is not regarded as complex, this may mean that you do not need to send HMRC a Self Assessment tax return (SA900) and can instead use ‘informal payment arrangements’.

An SA900 is required for the estate if either:

• The total Income Tax and CGT due for the administration period is more than £10,000.
• The estate was worth more than £2.5m at the date of death.

An SA900 is also required for the estate if the date of death was either:

• Before 6 April 2016 and more than £250,000 a year came from the sale of the estate’s assets.
• On or after 6 April 2016 and more than £500,000 a year came from the sale of the estate’s assets.

In some situations, an asset may be sold for an unexpected amount at the end of the administration period and the estate becomes a complex estate.

• A Self Assessment return is not required for the years when the estate otherwise met the ‘informal’ estates criteria and informal arrangements can continue to be used as planned.
• A Self Assessment return is only needed for the tax year in which the gain is realised on assets valued over £500,000.
• HMRC will only accept this process in cases where there has been uncertainty over the valuation or there is an unexpected sale or gain.

The newsletter includes an example to illustrate this point.

External link

Trusts and Estates newsletter: September 2021 

Useful guides on this topic

Trust Registration Service
What is the Trust Registration Service? What trusts does it apply to? What are the requirements and deadlines?

UK Trusts
What is a trust? What types of trust are there? How are UK trusts taxed?

How to set up a UK trust
What are the tax implications of setting up a trust? What do I need to do as a settlor? What do the trustees need to do?

How to wind up a UK trust
What are the tax implications of winding up a trust? What do I need to do as a trustee to wind up a trust? Why wind up a trust?

Trusts & Tax planning
What is a trust? How can trusts be used in tax planning? What are the advantages and what are the pitfalls?