This post follows on from that describing the new HMRC Trust Registration Service (“TRS”) below posted in 2017.
HMRC have confirmed, in an email exchange with me, that, in effect, a liability to stamp duty is a liability to a ‘relevant UK tax’ and therefore a trust which has only incurred a liability to UK stamp duty, and no other UK relevant tax, is still obliged to be registered. This may affect trusts holding unquoted shares.
HMRC have stated that their position is “that a trustee of a relevant trust that incurs stamp duty in relation to trust assets in a given tax year [is] required to register that trust on the TRS because the payment of stamp duty will cancel a SDRT charge that may otherwise arise. The TRS Regulations exclude a reference to stamp duty because an agreement for the purchase of shares normally gives rise to an immediate liability to SDRT and the SDRT liability is in turn cancelled by the payment of stamp duty. [HMRC] will ensure that in the next iteration of [their] FAQ guidance [they] will make this position clear”.
It had been widely understood that both the omission of an express reference to stamp duty in the Regulations, and the passage in HMRC’s original guidance, to the effect that a trust would not be regarded as having a liability to a UK relevant tax if there was a particular exemption or relief applicable, meant that trusts which had only incurred a liability to stamp duty, not SDRT, would have no immediate obligation to register. It is now clear that this is not intended to be the case.