TRSM32070 - Registration: contents: information required: contents: reporting a controlling interest in a non-EEA entity

Trustees of registrable UK express trusts and of registrable non-UK express trusts with at least one UK resident trustee are required to tell HMRC when they hold a controlling interest in a third country entity. This is because trusts that hold these interests may be subject to third country entity requests (see TRSM60000).

Trustees of non-UK trusts with no UK resident trustees that are registerble only because the trustees have acquired land or property in the UK (see TRSM22010) are not required to provide information on controlling interests in third country entities.

Definition of a third country entity

A third country entity is a body corporate (such as, a company), partnership or other entity that is governed by the law of a country or territory outside the UK and the EEA and that is a legal person under that law.

Definition of a controlling interest

A trust has a controlling interest when for any of the following the trustees hold on behalf of the trust:

  • directly or indirectly, more than 50% of the shares in the third country entity
  • directly or indirectly, more than 50% of the voting rights in the third country entity
  • the right, directly or indirectly, to appoint or remove a majority of the board of directors of the third country entity.
  • the right to exercise, or actually exercises, significant influence or control over the third country entity.

This essentially follows the definitions in Schedule 1A to the Companies Act 2006 for people with significant control over a company, modifying holdings to 50% instead of 25%. The same principles for calculating shareholdings, voting rights, or for when a person has significant influence or control over a company apply here.

Information to be provided

Trustees must provide the following details on the third country entity:

  • entity name
  • entity address
  • which country’s laws govern the entity
  • the start date of the trust’s ownership or controlling interest in the entity