HMRC has release details to the professional bodies of its late filing penalties for the trust registration service. There will be fixed penalties for trusts registered up to six months late and tax-geared penalties of 5% for registrations made more than six months late. These tax-geared penalties may include IHT, SDLT, LBTT and SRDT as well as income tax and CGT.
HMRC has confirmed it will take a risk-based approach, rather than charge penalties automatically, ‘particularly where it is clear that trustees or their agents have made every reasonable effort to meet their obligations under the regulations’. It will also tend towards leniency for the first year of TRS obligations.
Penalties can be charged for administrative offences relating to a requirement:
to register using the TRS by the due date of 31 January after the end of the tax year in which the trustees pay tax on trust assets or income; and
to notify any change of information by the due date of 31 January after the end of the tax year in which the trustees pay tax on trust assets or income.
No penalties will be charged for contravention of the requirement to notify changes of information until the online facility to notify HMRC becomes available.
The amount of the penalty will reflect the length of delay in registering:
up to three months after the due date: £100 penalty;
three to six months after the due date: £200 penalty; and
more than six months late: the greater of either 5% of the tax liability or £300.
HMRC intends to consult later this year on more serious penalties for money laundering.
HMRC has release details to the professional bodies of its late filing penalties for the trust registration service. There will be fixed penalties for trusts registered up to six months late and tax-geared penalties of 5% for registrations made more than six months late. These tax-geared penalties may include IHT, SDLT, LBTT and SRDT as well as income tax and CGT.
HMRC has confirmed it will take a risk-based approach, rather than charge penalties automatically, ‘particularly where it is clear that trustees or their agents have made every reasonable effort to meet their obligations under the regulations’. It will also tend towards leniency for the first year of TRS obligations.
Penalties can be charged for administrative offences relating to a requirement:
to register using the TRS by the due date of 31 January after the end of the tax year in which the trustees pay tax on trust assets or income; and
to notify any change of information by the due date of 31 January after the end of the tax year in which the trustees pay tax on trust assets or income.
No penalties will be charged for contravention of the requirement to notify changes of information until the online facility to notify HMRC becomes available.
The amount of the penalty will reflect the length of delay in registering:
up to three months after the due date: £100 penalty;
three to six months after the due date: £200 penalty; and
more than six months late: the greater of either 5% of the tax liability or £300.
HMRC intends to consult later this year on more serious penalties for money laundering.
