New Automatic Exchange of Information ‘AEOI’ Mandatory Registration for Trust Clients of Monahans – Trustees may need to act before 31 December 2025!

When did this change come in?

The International Tax Compliance Regulations 2015 were amended earlier this year, coming into force in July. It was unclear until very recently if investment portfolio managers would be dealing with the AEOI registration and reporting.

What is Automatic Exchange of Information ‘AEOI’?

AEOI is a global tax transparency initiative developed by The Organisation for Economic Co-Operation and Development (OECD). Its member countries are primarily developed nations committed to democracy and a market economy.

The Foreign Account Tax Compliance Act (FATCA) is a key component of AEOI requiring financial institutions to report information on financial accounts held by US taxpayers. The Common Reporting Standard (CRS) is another key component of AEOI, setting global standards for the automatic exchange of financial account information.

Will the trustees need to register their trust?

Trusts which are categorised as ‘Financial Institutions’ now need to register. The registration is a one-off requirement and once the Trust has been registered it will remain registered unless it deregisters from the AEOI service.

The revised framework extends its scope to include all trusts which are classified as a Financial Institution who are now subject to mandatory registration.

These fall into two main categories:

UK Financial Institutions (FI)

• trusts with individual trustees where more than 50% of the trust’s income is attributable to investing, reinvesting or trading in financial assets, and
• the trust or its assets are managed by an entity (e.g. a Discretionary Fund Manager).

Trustee Documented Trusts

• Trusts that are UK Financial Institutions, as above, but also have a Financial Institution as a trustee (e.g. a corporate trustee).

A Trust which derives more than 50% of its gross income from investments where those investments are managed by a discretionary fund manager will need to register either before 31 December 2025 or before 31 January following the year in which the Trust became a FI, whichever is later. For example, Trusts that became a FI in 2025 have until 31 January 2026, entities older than that have until 31 December 2025.

A Discretionary investment management service is provided by a portfolio manager who makes investment decisions on behalf of an investor, where the client and manager agree to a strategy and risk level, and the client gives the manager authority to execute trades without the need for approval.

Please confirm with your investment manager if the trust portfolio is managed on a discretionary fund basis.

Previously, registration for trusts that were FI’s was only necessary in circumstances where the Trust had a ‘reportable person’ which, very broadly, meant a beneficiary, trustees or settlor who was tax resident in another jurisdiction other than the UK. The recent updates made to the regulations now require all FI’s to register with HMRC’s AEOI service irrespective of whether they have reportable persons to declare or not.

Please refer to HMRC’s Manual at the link below for the full definition of ‘Financial Institutions’: https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim400600

How do I register?

HMRC provide guidance on how to register here: https://www.gov.uk/guidance/register-for-automatic-exchange-of-information

We understand you cannot use the same user ID for both AEOI registration and the Trust Registration Service (TRS). Each service requires a separate Government Gateway user ID. For AEOI registration, you need to select ‘organisation’ as your account type. If you are registering multiple trusts, you will need separate user IDs for each trust.

What information do I need to register?

You will need your contact details as the reporting trustee and the following:

• Organisation Name (the name of the trust itself) –
• Contact Information (name, address, telephone number, and email of the contact person, often the Lead trustee)
• Principal Place of Business address. (The address of the lead trustee)
• Taxpayer Reference (e.g., UTR, National Insurance number, or an indication that no UK tax identifier is held)
• Global Intermediary Identification Number (GIIN) if reporting under FATCA. If the trust is an Owner-documented financial institution (ODFI) i.e a Non-Reporting Financial Institution use 000000.00000.LE.000
• Filer category – where there are no US persons connected with the trust, this should be left blank

Do I have to do anything after I register?

After you have registered the Trust as a FI, you will be given an AEOI ID and a HMRC Registration Identification Number. These details should be kept safe as they will be needed if the Trust is required to submit any reporting to HMRC in future. Please share the HMRC Registration Identification Number with us and we will hold this on file.

Following registration, do I need to make a report?

If the trust itself is UK resident and anyone linked to it is UK resident (and not a US citizen) then there is no need to make a report. HMRC do not require FI’s to file a “nil return” if no account holders are ‘reportable’.

Please contact us for further information if anyone linked to the trust is resident outside the UK.

What if I do not register / report?

The amendments made to the International Tax Compliance Regulations 2015 earlier this year allow HMRC to subject FI’s to significantly higher penalties than under the previous regulations.

The amended regulations include penalties for:

• failure to register with HMRC – initial penalty of up to £1,000
• late returns – initial penalty of up to £5,000
• inaccurate or incomplete returns – initial penalty of up to £100 per account holder
• failure to provide information – initial penalty of up to £5,000