I am hoping someone can help. I have been involved with a client who had a discretionary trust set up to transfer some land and property at this point the CGT was paid.
The land and property were sold in 2013 and the Trust and Estate Tax Return were completed for the year to show the disposal. The trust then had no further use and I assumed (maybe wrongly) that no further tax returns would be required. A relief as it is not an area I am familiar with.
A tax return had been sent to the client who failed to tell me and has now been fined !
Does this trust need to be formally dissolved by a solicitor ? or is it sufficient to just advise HMRC that it has no further use and is not producing any income?
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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I would suggest that the Trust would need to be dissolved - whether it is do-able by the Trustees may be up to their knowledge of such and the actual trust deed - it might be worth running via a solicitor. Its just like anything - needs to be shut down properly and legally with HMRC being included in any communications as well as any Bank etc
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
My understanding is is if the trust has no assets or income, you just need to advice HMRC that the trust has been wound up as it has no assets or income. There should be something in the trust document about this event. HMRC don't know if you still have any assets or income unless you write to them and tell them.
If you wanted to have it wound up in order to have permission to sell the assets (normally because someone refused to let this happen), you would apply to the courts to do this and have the trust wound up. As you have already sold the assets you don't need to apply to the courts as technically the trust no longer exists.
I will write to HMRC and advise the situation that the trust has reached its end due to the sale of the property and land.
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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
