Can Be A Costly Mistake
A common misunderstanding we hear from clients is the belief that they can safely ignore a trust tax return request from HMRC if there’s no income or gains to report.
It’s understandable — if there’s no tax liability, it might feel like there’s no need to act. But here’s the reality: once HMRC issues a tax return request for a trust, it must be responded to, even if the return is a ‘nil’ return. Ignoring it will lead to automatic late filing penalties, and these fines are issued regardless of whether any tax is due.
HMRC operates on a procedural basis. If you don’t tell them a trust is dormant or file a return in time, the system assumes non-compliance. That’s where unnecessary fines and stress begin.
At WT Solicitors, we regularly support our trust administration clients who have found themselves facing unexpected penalties for exactly this reason. If you’ve received a request from HMRC, we can:
- Formally notify HMRC if the trust dormancy is appropriate to cancel your annual trust tax return requests
- Assist in appealing penalties (where appropriate)
- Refer you to a suitable trust accountant if you have returns that need to be filed
Being proactive can save you from HMRC complications. If you’re unsure what your obligations are, we’re here to guide you every step of the way.
🔍 If you’ve received a notice from HMRC and don’t know what to do next — speak to our trust team today on 01844 899150 or email us at info@willsandtrustssolicitors.com
Want to delve deeper
https://www.gov.uk/trusts-taxes – Provides official UK government information on how trusts are taxed, including when and how to file returns.
https://www.gov.uk/guidance/register-a-trust-as-a-trustee – Details on registering a trust with HMRC and keeping the information up to date.
https://www.gov.uk/self-assessment-tax-returns/penalties – Explains how HMRC applies penalties for missed or late tax returns, including trust-related filings.
Disclaimer: This post is for general information only and does not constitute legal or tax advice. For advice specific to your circumstances, please contact a qualified professional.
