Is my trust affected by new HMRC rules?

I understand HM Revenue & Customs is changing the rules around its trust register from September 1 and that this involves the type of trusts where property is held for the benefit of others. The trust might need to be registered with HMRC now and they might also need to be kept up to date with the details, such as trustee appointments. I’m concerned I might be liable for penalties if I don’t comply with the rules. How do I know whether my trust is included or excluded? Also, is HMRC likely to change the list of excluded trust types in future?

Reshan Ragunathan, trust and estates tax assistant manager at Kreston Reeves, says the HMRC trust register was introduced in June 2017 to assist the government in combating money laundering. At the time, only formal trusts, usually set up under a will or a trust deed, with a UK tax liability had to be registered. However, significant changes were made to legislation on October 6 2020.

These changes mean that, apart from in a limited range of exceptions, all trust arrangements in the UK, and some outside, need to be registered and their details kept up to date.

There is a deadline of September 1 2022 for the registration of all non-exempt trust arrangements in place after October 6 2020 (whether they have since ended or not), and this is extended to 90 days after the creation of any registrable trust arrangements set up after May 31 2022. The 90-day deadline applies for keeping the trust’s details up to date on the register, for example a change of trustees/beneficiaries or their contact details.

A trust arrangement is typically where individuals have the legal ownership of assets but hold this for the benefit of others. Typical examples that now need to be registered include trusts where a property has been left to a spouse to occupy for life under the will of their deceased partner; where an individual has investment bonds which — perhaps unbeknown to them — are written into trust; private company shares held in trust, as part of a tax planning arrangement; or, more simply, where a grandparent is holding shares as a nominee for their grandchildren.

The list of the types of trust arrangements exempt from registration and which are most commonly applicable to private individuals is long. It includes charitable trusts, bank accounts or stocks and shares Isas for minors, property/land co-owned but where the beneficiaries and trustees are the same persons, will trusts closed within two years of the date of death of the testator/testatrix. It also includes trusts where a disabled person is the beneficiary, trusts arising from insurance policies and compensation payouts and trusts imposed by legislation or a court order. Trusts can only be exempt if there is no UK tax liability.

HMRC continues to provide updates on exemptions, but there is no comprehensive list. It will begin issuing penalties in September for non-compliance, which will be £100 for missing the deadline, a further £200 penalty if three to six months late, and then the greater of 5 per cent of the trust’s tax liability or £300 if more than six months late.

Individuals that might be affected by these changes should in the first instance consult HMRC’s online trust registration guidance, but where assistance is needed they should contact a suitably qualified tax adviser as soon as possible so that they remain compliant and avoid any penalties.

Can I stop my ex taking our children on holiday?

My ex-husband and his new wife want to take our children on a holiday I believe is inappropriate for their age. They are not listening to my views and I feel completely disrespected. Should I make a legal claim against them?

Rosie Stewart is a senior associate in the divorce and family team at Stewarts, a law firm, says that under English law, as the children’s mother, you have parental responsibility for them. For this reason, your ex-husband and his wife cannot take the children out of the country without your consent. If you do not consider that it is in their best interests to go on the proposed holiday and you are therefore unwilling to consent to them doing so, it will be for your ex to either change his plans and propose a holiday you feel is more appropriate. If he insists on the original holiday, he will need to make an application to court for a specific issue order.

If your ex makes an application to court, the judge’s paramount consideration in deciding whether the children should go on the holiday will be their welfare. Their needs and interests will take priority over those of your ex or his wife. If the court agrees with you that the proposed holiday is inappropriate for the children’s ages, to the extent it could cause, or put them at risk of any form of harm (including physical or emotional harm) the court will not make the order.

Similarly, having considered all of the relevant facts, including the specifics of the proposed holiday, if the court concludes that your concerns are unfounded, permission for the children to travel on holiday will be granted.

Though the court has the power to determine this dispute between you and your ex, it would be better for the children if the two of you agreed the holiday arrangements without recourse to court. If there are court proceedings, and depending upon their ages, the children may be required to speak to a court-appointed social worker about their wishes and feelings in relation to the holiday.

While the social worker’s interactions with the children would be handled sensitively it would inevitably reveal to them that there is a dispute between their parents, which they might find unsettling and difficult to understand. This in itself could cause the children emotional harm.

An alternative to court action is mediation with a specialist family mediator.

This should provide you both with a forum to express your views and to be listened to by one another so that with the help of the mediator you can reach an agreement as to the best holiday plans for the children without the emotional and financial cost of court proceedings.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.