HMRC revealed that there are currently 633,000 registered and active trusts and estates using the Trust Registration Service (TRS) in the UK, according to the most recent statistics.
Between April 1, 2022, and March 31, 2023, 462,000 new trust and estate registrations were made, accounting for around 75 per cent of the total number of registered trusts and estates.
In comparison to the prior year, there were 3 per cent fewer trusts and estates overall that submitted Self Assessment forms for the tax year ending in 2022.
In the tax year ending in 2022, trust and estate income totalled £3,075m, above pre-pandemic levels when income was £3,050m in the tax year ending in 2020.
Payments for capital gains tax increased from the prior year by 27 per cent in the tax year ending in 2022, totalling £1,055m.
Canada Life pensions, tax and estate planning specialist John Chew says: “This latest update shows new trust registrations are up, driven by the HMRC deadline, but I’m not sure all relevant trusts have been captured in the UK yet so there is more to do here.
“Receipts from CGT are up by 27 per cent, likely driven by trusts which contain collective portfolios and have been impacted by the fall in allowances. Despite the number of registered trusts subject to taxation falling, with further changes to CGT coming, inevitably this will draw more trusts into the tax net.
“Trusts held within insurance bonds, deemed as non-income producing from a tax perspective will likely become increasingly popular as an alternative to income-producing trusts.
“It’s interesting to note a disproportionate amount of Interest in possession trusts produced a high level of income, with 7 per cent of Interest in possession trusts with income over £100,000 producing £765m of income in the last tax year, around 71 per cent of the tax receipts.”
