TSEM1405 - Introduction to trusts: new trusts: trust with no likelihood of income or gains
A trust may have no income, and no likelihood of income or gains. There is no point in issuing an annual SA return.
New trust
The trustees need not notify the trust office of the existence of the trust. However, where the trustees do so and it is decided not to set up an SA record any correspondence should be saved electronically and the original destroyed, in accordance with the retention and storage policy that has been developed for these types of cases. For details of the retention policy you should refer to the guidance published on the Knowledge Resources' Records Management intranet
Existing trust
The trustees can ask that the trust office either
- closes the record for the trust or
- does not issue annual SA returns.
If the trust office agrees the application, it will not issue annual returns. It may review the position periodically. If exceptionally the trust office decides for any reason to issue a return, the trustees must complete it.
The trustees still have a legal responsibility to notify the trust office of chargeability to income tax and/ or capital gains tax for any year for which no return is issued. HM Revenue and Customs may not know about trusts because they simply hold insurance policies. Because of a change in the legislation they might fall foul of the chargeable event gains legislation (TSEM3210). They may receive shares (and therefore income) because of demutualisation.
