Tax Transparency – every little helps
This month sees the launch of the new register of beneficial ownership of trusts .
Tax transparency
The UK Government undertook obligations under the Fourth Money Laundering Directive, and as part of this has introduced a new Trust Register. The idea is to open up the secretive world of trusts to greater external scrutiny via an online Trusts Register.
Open, but not open
Unlike the People with Significant Control (PSC) beneficial ownership register for companies, the Trust Register will not be open to the public. It will only be available to law enforcement bodies and the UK Financial Intelligence Unit.
Key points
- There will be an online Government register;
- The register will apply to all UK trusts;
- The register will also apply to non-UK trusts in receipt of UK sourced income, or with assets in the UK carrying a UK tax liability;
- Trustees will have an obligation to update the Register each year that a trust generates a ‘UK tax consequence;’
- Trustees will need to give details on the Register of the settlors, the trustees, any person exercising effective control over the trust and any beneficiaries;
- There will be a requirement to provide a statement of accounts for the trust, describing the trust assets and identifying the value of each category of the trust assets and the address of any property held by the trust).
Kick off
For trusts in existence at that time, the first filing deadline will be on or before 5 April 2018. For trusts created after on or after 6 April 2018, the first deadline for filing will be the date on which the trustees first become liable to pay UK taxes.
HMRC say
The Trusts Register will provide a single point of access for trustees and their agents to register and update their records online, replacing the current paper 41G(Trust) form and the ad hoc process for trustees to notify changes in their circumstances. The new service, known as the Trusts Registration Service, will provide a single online route for trusts and estates to comply with their registration obligations and the benefits include:
- no more forms lost or delayed in the post
- you will only see those questions relevant to your particular type of trust or estate
- you can print a copy of the summary page and keep this for your records.
What is all this information going to be used for?
According to the government, the information will be used to give “law enforcement and compliance officers the tools they need to combat the misuse of trusts”. HMRC will also be able to compare the Unique Taxpayer References and/or National Insurance Numbers of the parties to a trust and factor these into its wider understanding of those persons’ tax liabilities.
Levy and Levy comment
There are, of course, vast amount of laundered funds floating around the global financial system. According to the United Nations Office on Drugs and Crime:
‘The estimated amount of money laundered globally in one year is 2 – 5% of global GDP, or $800 billion – $2 trillion in current US dollars. Though the margin between those figures is huge, even the lower estimate underlines the seriousness of the problem governments have pledged to address.’
It is to be hoped that the new Trust Register will contribute to making at least a small dent in the amount of laundered money. Every little helps.
Levy and Levy – the tax investigations and resolution specialists