Offshore trusts that indirectly hold UK residential property do not need to register

HMRC has conceded following a letter from STEP’s UK Technical Committee that non-UK trusts that incur IHT as a result of schedule A1 do not need to register on the TRS on the basis that no other UK tax is due by the trustees in relation to trust assets or income. Previously, HMRC held the view that such a trust should register if it incurs an IHT liability on shares in a non-UK company that holds UK residential property, but has now accepted STEP’s legal argument that registration is only required if the trust receives UK-source income or holds UK assets on which UK income tax, capital gains tax, inheritance tax, stamp duty land tax or stamp duty reserve tax is due.

Source: Step

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