On 31 January, HMRC changed its guidance on unauthorised unit trusts, including Jersey Property Unit Trusts (JPUTs).
This new guidance has perhaps put a cat among the pigeons.
Previously, HMRC advised that neither authorised nor unauthorised unit trusts needed to be registered on HMRC’s trust register unless the unit trust became liable to certain UK tax liabilities.
However, the guidance for unauthorised unit trusts has now changed, meaning that JPUTs may need to be registered even if they don’t have a liability to UK tax.
JPUTs will need to be registered if they acquire UK land directly or intend to do so since 6 October 2020.
There are only two situations in which a JPUT may need to be registered: when it becomes liable for UK tax or when it acquires UK land after 6 October 2020.
If a JPUT is required to be registered, the relevant information, including contact details for each trustee and unit holder, will need to be compiled and submitted via HMRC’s online system.
The change in HMRC’s guidance means that many more JPUTs will be required to be registered on HMRC’s trust register.
Trustees and advisers should urgently check whether they have any trusts which should now be registered, and ensure they comply with the registration requirements.
Although HMRC is currently adopting a light-touch approach to penalties, trustees and advisers should not rely on this and should ensure they comply with the registration requirements.
If you have any queries relating to JPUT or tax matters more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.
The EU introduced trust sanctions in respect of Russia last year. However, the effect of these sanctions has had international impact.
Despite announcing its intention to introduce trust sanctions some time ago, the UK trust sanctions, provided for in Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 (“The Regulations”), only came into force last month.
However, there are some important differences between the regimes.
The UK sanctions include a prohibition on providing trust services to or for the benefit of a person connected with Russia or to a ‘designated person’ (unless the services were provided immediately prior to the regulations coming into force).
The Regulations came into force on 16 December 2022. They amend the Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855).
The amendments define “trust services” as follows:
A person is broadly considered “connected with Russia”:
The EU’s sanctions focus on the nationality or residence of a trust’s settlor or beneficiary. As such, there are some notable differences.
Firstly, under the UK’s rules, a private individual who is a Russian national but is resident elsewhere will not automatically be considered connected with Russia for these purposes.
The UK rules also provide helpful guidance about when trust services are “for the benefit” of a person. This includes circumstances where services are provided to a person:
The new rules are ‘forward-facing’. As such, these sanctions won’t apply to trust services that are already being provided under an existing relationship at 16 December 2022. A key question is whether additional or different work can be provided under this existing relationship or whether a ‘new instruction’ is a new relationship?
Additionally, The Office of Financial Sanctions Implementation (“OFSI”) has confirmed that it will consider granting licences for trust work if that work falls within certain exceptions. This might include charitable pursuits.
Of course, UK trust provides, and those providing services in Crown Dependencies and British Overseas Territories, will need to be mindful of these sanctions. In terms of how they might apply to new relationships and the extent to which new instructions by existing clients within the scope of these rules might constitute a new relationship.
If you have any queries on UK expands Russian sanctions to trust services or UK tax matters more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article
Dovetailing the robust growth of private banking and wealth management industries and strong growth in Singapore trust services, Singapore strengthened its status as an international financial centre.
Singapore is seen as an enticing base for trusts based on its;
Asian family businesses form the backbone of the economy in the Asia Pacific region, with 85% of companies owned by a family group.
A research study found that 20% of the top 750 global family businesses are Asia-based, with combined revenue of USD2 trillion.
Many family businesses will be undergoing a transition in the next five years. It is anticipated that over 30% will undergo a generational change.
A well-planned trust structure is a flexible vehicle ensuring a smooth succession of assets and protecting wealth for the next generation.
It allows you to maintain confidentiality while ensuring that your wealth will be well cared for.
Pre-IPO trusts are also valuable for securing wealth and liquidity created during an IPO.
Trusts are not legal entities. It is best described as an arrangement where the asset is transferred to a trustee who then holds that asset for
the gain of specified people or objects.
The lack of formal requirements for trusts, and the flexibility of a trust, make them uniquely useful for estate and succession planning.
In Singapore, trusts are regulated principally by the Trustees Act. The Act was significantly revised in 2004. Singapore trust laws are primarily based on English trust law.
Here are the essential features of Singapore trust law:
Many Singaporean and foreign High Net Worth Individuals are choosing Singapore trusts as their preferred vehicle for succession planning and wealth management because of the advantages Singapore offers as a trust jurisdiction.
If you have any general queries about this article on Singapore Trusts or Singapore tax matters, please do not hesitate to get in touch.