In recent years, our trust clients have had to deal with many changes brought about by the introduction of the Trusts Act 2019. There is now another change on the horizon that will also significantly impact them.
On 7 December 2020, the Taxation (Income Tax Rate and Other Amendments) Bill was passed introducing requirements for trusts for the 2021-22 tax year onwards.
The new rules apply to trustees of trusts that derive assessable income in a tax year and who are required to file a tax return. This means the changes won’t apply to the following types of trusts:
- Non-active trusts
- Foreign trusts
- Charitable trusts
The new requirements affect how trust financial statements are prepared and require additional information to be provided in trustee tax returns. For some trusts, this will lead to increased compliance costs.
The information that trustees will need to provide include:
- The amount and nature of settlements received
- The amount and nature of distributions made
- Settlor details, including details of previous settlors (if not previously supplied)
- Details of beneficiaries
- Appointer details
Click here to see more details of these changes in the Inland Revenue’s “Introducing the changes for trusts - summary sheet".
Our team of Private Wealth experts are currently working through what these changes mean for our clients and their trusts and will be in contact to give more specific details as they start to prepare the accounts and tax returns for the end of financial year.
If you want to learn more about how the changes impact you and your trust, our team is here to offer you support and advice, please contact us on 0800 878 783 or email email@example.com
Due to the IRD legislative requirements, Trustees Executors will be required to charge fees for the completion of this work on a Time & Attendance basis.