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Posted Fri, 23 Dec 2022 13:08:10 GMT by A Hong
Hi, My father has set up a personal injury bare trust for his compensation. His only other income is Universal credit. We will be setting up a Trust current account with an interest rate of 10% therefore his annual income from the trust will only be interest of less than £5k. Does he need to register for self assessment for this and submit a return? And if so, is this income to be declared in the interest section?
Posted Fri, 23 Dec 2022 13:47:19 GMT by A Hong
I wrote the wrong rates of interest in error - the interest rate is 0.10% which would make the interest income on the bare trust to be under £50 per year. Please advise if there's any requirement to register for self assessment for this.
Posted Fri, 23 Dec 2022 16:56:25 GMT by HMRC Admin 2

Most trusts need to be registered for Self Assessment, unless the trust was imposed by a court or created through legislation.  

The trust will need to register for a trust and estates Self Assessment tax return (SA900), so that the income can be taxed.  

The beneficiaries of the trust will also need to register themselves for Self Assessment (SA100), so that they can declare their net income from the trust. 

Trusts and taxes

Thank you.
Posted Fri, 23 Dec 2022 17:46:02 GMT by A Hong
Hi, I think the advice given here conflicts with the documentation provided on the website. We were also told that as this is a personal injury bare trust it would only mean filing a personal tax return The link to bare trusts only refers to the self assessment tax return. The guidelines for filling out the SA100 tax return also states: "6. Trusts etc Fill in the Trusts etc pages if you were: a beneficiary of a trust (not a bare trust) or settlement" As mentioned, this is a bare trust for which my father is the beneficiary so per section 6 he would not have to fill in the Trust etc pages. Also, the interest income would be so minimal (under £50 per year) so should be covered under his personal allowances and therefore no taxes should be payable. Can I please ask you to check and confirm if he does indeed have to register for self assessment
Posted Wed, 28 Dec 2022 17:26:38 GMT by
Hi A Hong,

Please refer to further guidance as there may still be a requirement to register:

TRSM10030 - Introduction to the Trust Registration Service: contents: common types of trusts and interaction with the register

Thank you. 

Posted Thu, 29 Dec 2022 16:59:58 GMT by A Hong
Hi, I think there may be some misunderstanding here. I’m not asking whether there’s a requirement to register with TRS. This is a personal injury trust which is excluded from registration. The question is in relation to trust income. As explained, the only income on the trust would be interest of less than £50 per year. This should be within my father’s annual personal allowances. That being the case, is he actually required to register and submit a personal self assessment tax return or not?
Posted Thu, 05 Jan 2023 14:13:01 GMT by HMRC Admin 32

No, a personal tax return is not required.

Thank you.
Posted Thu, 05 Jan 2023 14:36:54 GMT by A Hong
Thank you for confirming.
Posted Mon, 06 Mar 2023 15:22:20 GMT by JanLowe
If your father's only income is Universal Credit and the interest income from the trust is less than £50 per year, then he does not need to register for self-assessment or declare this income on his tax return.

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