Legislation matters

HMRC Trust Registration Service to encompass Self Invested Personal Pensions and Small Self Administered Schemes.

Rather belatedly, it has now been confirmed that the registration of trusts will encompass both Self Invested Personal Pensions (SIPPs) and Small Self-Administered Schemes (SSASs) that have a Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT) or Stamp Duty Reserve Tax (SDRT) liability in any tax year from, and including, tax year 2016/17.

Any scheme which acquired property and on which SDLT was payable will be effected as will any scheme that made a direct purchase of shares (those holding shares through a dealing account are not affected.

Dentons are intending to identify schemes on which we are administrator or co administrator but if you have clients without professional trustees please make them aware of the need to register their scheme as soon as possible.

To access the initial registration page please use this link https://www.gov.uk/trusts-taxes/trustees-tax-responsibilities and then click ‘register your trust online’ under Registering for Tax.
 
Schemes which incurred a liability to SDLT, LBTT or SDRT during the tax year ending 5^th April 2018 have until October 2018 to register.
 
Revenue Scotland clarifies tax ruling for transfer of property in-specie between pension schemes.

An in specie transfer of property between registered pension schemes is a transaction in which a pension scheme acquires property and is subject to the Land and Buildings Transaction Tax (LBTT) where there is chargeable consideration in the same way as any other transaction. 

LBTT applies to commercial land and buildings transactions (including commercial purchases and commercial leases) where a chargeable interest is acquired. In Revenue Scotland's LBTT Technical Bulletin 3, dated 28 December 2017, it has stated that while such in-specie transfers are still considered to be land transactions, debt in the form of the liability assumed to pay benefits to pension scheme beneficiaries will not generally be considered to be given as chargeable consideration in relation to such transactions. However, any consideration given in the form of money or money’s worth for the transfer of the properties will still be chargeable to LBTT.
 
This view applies both prospectively and retrospectively and Revenue Scotland will consider claims to repayment of tax from any taxpayers who have filed and paid LBTT based on the view as stated in its October 2016 bulletin. Schemes can make claims by amending a previously submitted return, if within time to do so, or through written correspondence in accordance with the online guidance on making a claim under section 107 of The Revenue Scotland and Tax Powers Act 2014 provided at RSTP7003.
 
De-registration powers for SSASs following scams.

The proliferation of scams using SSASs resulted in the tabling of a Finance Bill in October 2017 that would see HMRC’s powers extended to deregister schemes where there has been no employer or a dormant employer at any time within a 12-month period. These new powers are scheduled to become effective from 6 April 2018.

The de-registration of a scheme has severe tax consequences and worry has been expressed by advisers and some practitioners that these powers could bring about the deregistration of legitimate schemes, which, through some corporate action, no longer have a sponsoring employer.

However, in a letter to AMPS, the self-invested pension industry’s trade body, HM Treasury confirmed the legislation was intended to target schemes established for the purposes of investment or liberation scams and not legitimate schemes.

We understand that any scheme under the review of HMRC will first receive a notice of intended de-registration and this will allow a case to be appealed and postponement of any tax charge pending a Tribunal hearing.