Whilst most of us have been focusing on Christmas and New Year, trustees have recently had an additional task – considering if they have any new reporting obligations under the International Tax Compliance (Amendment) Regulations 2025.
These were announced in the 2024 Budget and following a government consultation, the new regulations came into effect from 16th July 2025 to bring us in line with international obligations.
As a brief history, around 10 years ago, we had the introduction of the Foreign Account Tax Compliance Act (FATCA). This meant that any trusts that were classed as a Financial Institution had to be registered with the Internal Revenue Service (IRS) in America. In a broad terms, a UK trust is classed as a Financial Institution if more than 50% of its income comes from an investment portfolio managed by a third-party investment manager.
The Organisation for Economic Co-Operation and Development (OECD) adopted this system of classification with the introduction of the Common Reporting Standards (CRS) which further extended reporting obligations for trusts in participating jurisdictions.
Under FATCA and CRS, any UK trusts classed as a Financial Institution with a US (FATCA) or other overseas (CRS) beneficiaries had to register and report to HMRC under the Automatic Exchange of Information (AEOI) provisions.
The new amendments now mean that even if the trust has only UK based beneficiaries, if it is a Financial Institution, it is now required to register for AEOI even though there may not be any further reporting to do.
The deadline for this additional registration was 31st December 2025.
It is a relatively simple process and can be done through the Government Gateway Account (GGA) set up by trustees to deal with the Trust Registration Service (TRS) online.
Failure to comply with the notification requirements may lead to a penalty of up to £1,000 and daily penalties of up to £300 per day may also arise until the registration requirements are met. Penalties may not apply if HMRC accept a “reasonable excuse” from the trustees for not doing so.
Greene & Greene are happy to assist trustees in relation to this additional compliance obligation and any other trust administration and can contact Gemma Stow or Nigel Scase in the private client team to discuss further.
This is only intended to be a summary and not specific legal advice.
