Declaration of trust

I am writing to seek clarification on the reporting requirements for income generated from shares held under a declaration of trust. I would be grateful if you could provide guidance on the matter. I am currently holding HSBC shares on behalf of my mother, who is American and not UK tax resident, under a declaration of trust. The declaration of trust clearly establishes my role as the trustee and my mother as the beneficial owner of the shares. However, I am uncertain about the proper reporting procedures for the income generated from these shares. Considering the ownership arrangement outlined in the declaration of trust, I would like to understand whether I, as the trustee, am responsible for reporting the income generated from the shares to HMRC as I am a UK tax resident but my mother is not UK tax resident. I would greatly appreciate your advice.

Hi,

Please refer to guidance at:

HS270 Trusts and settlements — income treated as the settlor's (2023)

Thank you.

Hi HMRC I solely bought a property in 2018 (mortgage free) which I received rental for and duly paid tax on. In 2021 my wife and I set up a limited company to manage this property and this limited company then began receiving the rent. We set up a declaration of trust when we set up the limited company stating “that I herby give permission for the limited company to act as a managing agent for the property and receive all rental income. This is on the understanding the ownership of the property is NOT altered or affected and the limited company is liable for any tax on rental income received “ HMRC have recently questioned this and asked to see my arrangement. Is what I have in place adequate and legal and does not trigger any stamp duty / capital gains issues. Thank you

Hi ,
 

Thank you for your question.  I am unable to answer this question without seeing a copy of the blind trust you have had drafted.  Please send a copy of any documents you have to HMRC at Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom.  We will then be in a better position to advise you . Thank you .