HMRC is contacting some trustees after identifying possible errors in recent Trust and Estate tax returns relating to the type of trust being reported.

The latest HMRC compliance campaign focuses on trusts where box 8.15 of the Trust and Estate Tax Return was ticked to indicate that the trust is not an accumulation or discretionary trust. HMRC says its records suggest that some of these trusts may in fact fall within this category and could therefore have been taxed at the wrong rates.

Accumulation and discretionary trusts generally pay Income Tax at special rates of 39.35% on dividend-type income and 45% on other income, compared with lower rates for many other trusts. Some discretionary trusts are exempt from the special trust rates.

Trustees receiving a letter should review each relevant tax return and respond to HMRC by 2 November 2026. If the returns are correct, HMRC should be told. If additional tax is due for 2024-25, the return should be amended and the tax paid. Earlier years may require a voluntary disclosure to be made. There may be interest to pay and, depending on the circumstances, a penalty may also be due.

Trustees should also check that the trust's details on the Trust Registration Service remain accurate. HMRC requires trustees to keep relevant information up to date, including changes to beneficiaries.

If you receive one of these letters we can help you review your position and advise on the appropriate action.

Source:HM Revenue & Customs | 21-09-2026
Categories: Inheritance Tax

by Admin

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