HMRC is proposing to widen a simplification that keeps small trusts and estates out of paying tax and self-assessment, according to Helen Thornley Helen Thornley, ATT Technical Officer at The Association of Taxation Technicians.

But any benefits for trusts are likely to be offset by new Trust Registration Service requirements, she said in a briefing note for AccountancyWEB, the independent online community for accounting professionals.

HMRC is now consulting on proposals to legislate a slightly broader approach that would allow a trust or estate with total income of less than a certain de minimis amount not to have to report or pay tax. 

This wider de minimis test would therefore not only cover bank interest but also helpfully include dividend income or even income from land and property. This could be useful where there are small receipts. 

The consultation states that the de minimis amount is to be determined, but hints at an amount of £500. This is broadly the income equivalent of the existing £100 limit on the tax liability that can be ignored. 

Thornley said she expected that there are generally few trusts with a sufficiently low income to benefit from these changes, but no doubt those that can benefit will find it helpful.