New rules for Trust Compliance

Trusts now have new rules on disclosures. Previously, trusts have not needed to file financial statements or details of non-taxable transactions. This has now changed. Inland Revenue will now be collecting more information so it can keep a closer eye on how trusts are being used.

Trusts now need to provide more financial information

From April 2021 onwards, all annual returns for trusts will need to include:

• Financial statements

• Details of settlements

• Details of distributions, taxable or not

• Any other information required, like loans and transfers involving associated persons or related parties.

Charitable and non-active trusts are exempt since they don’t need to file a return.

You can read more about the new taxation bill here.

It is vital to make sure you comply with the rules so your trust isn’t declared a sham – if that happened, you would lose any advantages that the trust provides.