Official Statistics

Background quality report: statistics on trusts in the UK

Updated 12 October 2023

1. Contact

• Organisation unit - Knowledge, Analysis and Intelligence (KAI)
• Name – A Hatton
• Function – Statistician, Specialist Personal Tax Statistics
• Email - personaltax.statistics@hmrc.gov.uk

2. Statistical presentation

2.1 Data description

This methodology and quality report relate to the National Statistics publication, Statistics on trusts in the UK, and the purpose is to provide users with information about the quality of the outputs as set out by the Code of Practice for Official Statistics.

This publication is released annually and sets out the number of trusts in the United Kingdom (UK), based on data submitted via Self Assessment and Trust Registration Service (TRS) returns made in respect of trusts and estates. This publication also sets out their incomes and payments of UK Income Tax and Capital Gains Tax based on receipts information from HMRC’s administrative systems.

2.2 Classification system

Breakdowns of the number of trusts, incomes and tax paid presented in the statistics reflect relevant tax-related concepts as defined in section 2.4 ‘Statistical concepts and definitions’.

2.3 Sector coverage

Income and taxation figures in this publication cover all trusts and estates that have completed Self Assessment returns, irrespective of the type of trust.

Figures on overall numbers of trusts and estates are derived from submissions to the TRS, not all trusts and estates are required to be registered with this service.

2.4 Statistical concepts and definitions

Asset

For the purpose of these statistics, an asset is something that can be placed in a trust, which can include money, investments, land or buildings.

Trust

A trust is a legal arrangement which involves someone (the ‘settlor’) transferring their assets to one or more individuals or companies, or a combination of these (the ‘trustee’), who is made legally responsible for the assets. The trustee holds these assets for the benefit of one or more persons (the ‘beneficiaries’) identified individually or collectively by the settlor.

Express trusts

An express trust is a trust created deliberately by a settlor, usually in the form of a document such as a written deed or declaration of trust. Express trusts can be contrasted with trusts that come into being through the operation of the law and that do not result from the clear intent or decision of a settlor to create a trust or similar legal arrangement.

Settlor

The settlor is the individual who places their assets into a trust. They decide how the assets in a trust should be used – this is usually set out in a document known as the ‘trust deed’ or written in their will. Sometimes the settlor can also benefit from the assets in a trust – this is known as a ‘settlor-interested’ trust and has special tax rules.

Trustee

The trustees are the legal owners of the assets held in a trust. Their role is to:

• deal with the assets according to the settlor’s wishes, as set out in the trust deed or their will
• manage the trust on a day-to-day basis and pay any tax due
• decide how to invest or use the trust’s assets

If the trustees change, the trust can continue, but there always must be at least one trustee.

Beneficiary

There might be more than one beneficiary, like a whole family or defined group of people. They may benefit from:

• the income of a trust only, for example from renting out a house held in a trust
• the capital only, for example getting shares held in a trust when they reach a certain age
• both the income and capital of the trust

Trust deed

A legal document that creates a trust, giving trustees the right to manage assets and states how this should be done.

Discretionary/ Accumulation trusts

Discretionary trusts are a type of trust where the trustees can make certain decisions about how to use the trust income, and sometimes the capital. Depending on the trust deed, trustees can decide what gets paid out (income or capital), which beneficiary to make payments to, how often payments are made and any conditions to impose on the beneficiaries. Discretionary trusts are sometimes set up to put assets aside for a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life, or beneficiaries who are not capable or responsible enough to deal with money themselves.

Most discretionary trusts will also have the power to accumulate income, that is, instead of paying it out to beneficiaries, the trustees may add it to trust capital. More unusually, a trust may require the trustees to accumulate all income and not pay it out. Such an ‘accumulation’ trust can be used to build capital.

Interest in possession trusts

Interest in possession trusts are a type of trust where the trustee must pass on all trust income to the beneficiary as it arises (less any trustees’ expenses).

The beneficiary who receives income often does not have any rights over the capital held in such a trust. The capital will normally pass to a different beneficiary or beneficiaries in the future. Depending on the terms of the trust, the trustees might have the power to pay capital to a beneficiary even though that beneficiary only has a right to receive income.

Mixed trusts

A mixed trust is one where the income is taxable on more than one basis. This may be because there are distinct different parts to the trust fund so that income is always held in different trusts. Alternatively, changes to the trust may occur depending on the beneficiaries’ circumstances. For example, 2 children benefit from a discretionary trust. According to the terms of the trust deed, the children are entitled to a share of the trust income when they reach 18 years of age. The first child reaches 18 while the second child is still 14. The part of the trust benefitting the first child becomes an interest in possession trust, while the part that benefits the second child remains a discretionary trust until they reach 18. In other words, when the first child reaches 18 the trust becomes a mixed trust.

Death estates

When a person dies, their various possessions form their estate. This may include money, clothes, furniture, investments, land and property. The person’s personal representatives become the legal owners of all types of property left by the deceased, except for any ‘gift on account of death’. They are responsible for these assets from the date of death until the date everything has been passed on to the beneficiaries, which is known as the ‘administration period’. Further information can be found at Dealing with the estate of someone who’s died. Death estates are referred to as “estates” or categorised with “other trusts” in this publication.

Other trusts

For the purposes of this publication, other trusts refer to death estates and any type of trust that is not a discretionary/accumulation trust or interest in possession trust. Typically, this includes heritage maintenance trusts, vulnerable beneficiary trusts and charities. Further information on the other types of trust can be found at Trusts and taxes.

Tax year

The statistics are aggregated into tax years. A tax year stretches from 6 April until 5 April of the following calendar year.

Trust income

Trust income can be dividend-type income such as income from stocks and shares, or non-dividend type income such as rent, trade, savings. Both income types have different tax rates which depend on the type of trust.

Income Tax

Income Tax is a tax on an individual’s income over the course of a tax year. Income Tax is the UK Government’s largest single source of tax revenue.

The amount of Income Tax an individual should pay, their tax liability, is determined by several factors including: their level of income, the type of income and the level of allowances to which they are entitled, and where in the UK they are located (as some aspects of Income Tax have been devolved).

Capital Gains Tax

Capital Gains Tax is charged on gains realised on the disposal of assets. Types of disposal include sales, gifts, exchanges and gaining compensation for assets. Typical assets include most personal possessions above a certain value, property, shares and business assets. The capital gain is broadly the difference between the disposal proceeds and the cost of acquiring the asset. There are various reliefs and exemptions which may affect the amount of Capital Gains Tax to be paid.

2.5 Statistical unit

The unit in the statistics is trusts and estates.

2.6 Statistical population

All trusts and estates with submitted Self Assessment tax return forms to HMRC and/or registered and recorded as open on the TRS.

2.7 Reference area

The geographic region covered by the data is the United Kingdom (UK).

2.8 Time coverage

The Self Assessment statistics cover the time period from the tax year ending 2004 until the latest tax year for which Self Assessment returns are available.

The TRS statistics cover the time period from the creation of TRS in 2017 up to the latest complete April to March 12-month period.

3. Statistical processing

3.1 Source data

The information provided on trust and estate Self Assessment returns is the main data source used for this publication, while TRS data is also used to determine the number of trust registrations. Tables 4, 6, 7 and 8 contain information on chargeable gains and Capital Gains Tax liability, including data from residential property reported through the Capital Gains Tax on UK property service for the tax years ending 2021 onwards.

Trustees and personal representatives of UK trusts and estates must complete Self Assessment tax returns if the trust and/or estate incurs a liability for Income Tax or Capital Gains Tax. Self Assessment, introduced in tax year ending 1997, is a business system operated by HMRC where individuals, trusts and unincorporated businesses (for example partnerships) return information on Income and Capital Gains. Further information on these can be found on the respective pages for Income Tax and Capital Gains Tax statistics. The Self Assessment system calculates tax liabilities using tax return data, accounts for payments and repayments, and administers penalties and interest for late payment and late filing of returns.

HMRC’s primary purpose for collecting data through these administrative sources is to ensure that taxpayers are paying the correct amount of tax or receiving the correct reliefs and repayments. The purpose of data collection through the TRS is to comply with rules by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 to ensure the UK has an anti-money laundering and counter terrorist financing regime that is up to date, effective and proportionate, and improved transparency about the ownership of assets held in trusts. Though estates are not themselves subject to registration on TRS under Money Laundering Regulations, some estates also have to register if the personal representatives need to complete a Self Assessment return, because TRS is the mechanism for estates to acquire a Unique Taxpayer Reference number. HMRC’s policy on the use of administrative data for producing statistics is set out in the HMRC Statement of Administrative Sources.

The following types of trusts were expected to have registered with TRS by 1 September 2022 even if they have no tax liability:

• all UK express trusts - unless they are specifically excluded
• non-UK express trusts, like those that:
  • acquire land or property in the UK
  • have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK

Trusts did not need to be registered with TRS before the deadline if any of the following applied, unless it had a liability to pay UK tax:

• the trust is used to hold money or assets of a UK registered pension scheme — like an occupational pension scheme
• the trust is used to hold life or retirement policies providing that the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured
• the trust is holding insurance policy benefits received after the death of the person assured — as long as the benefits are paid out from the trust within 2 years of the death
• it’s a charitable trust that is registered as a charity in the UK or which is not required to register as a charity
• it’s a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100 — pilot trusts set up on or after 6 October 2020 will need to register
• it’s a co-ownership trust set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’
• it’s a will trust created by a person’s will and comes into effect on their death providing they only hold the estate assets for up to 2 years after the person’s death
• it’s a trust for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme
• it’s a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets

Other less common types of express trusts which are set up for particular purposes are also excluded from registration unless they have to be registered because they are liable to pay tax. Further information on excluded express trusts is available on GOV.UK. Trusts which are not set up deliberately by a settlor but are imposed by courts or created by legislation, are not ‘express trusts’ and are not required to register. Some financial products and arrangements with ‘trust’ in their description, like the ‘child trust fund’ or ‘venture capital trusts’, are not really trusts, so do not need to be registered. Further information on exceptions for registering trusts can be found in the guidance for registering a trust as a trustee.

3.2 Frequency of data collection

The data from all Self Assessment forms submitted is extracted from HMRC’s Computerised Environment for Self Assessment (CESA) into HMRC’s Corporate Data Warehouse (CDW) daily. Data is sent from CDW to KAI at the end of each month if it is new or has been updated since the previous monthly extract. These statistics are compiled on an annual basis from an extract of the live Self Assessment system; this extract is typically taken in September.

To register trusts on the TRS, trustees and personal representatives use Government Gateway to access an online registration system. The data they provide is lodged into HMRC’s ETMP system for which KAI have access to a regular data extract. This service is continuously collecting data submitted by users. The TRS statistics in figure 1 and table 1 of this release are based on a data extract taken from TRS on 31 August 2023.

3.3 Data collection

Tax returns should be filled in after the end of the tax year to which they apply. Depending on how the tax returns are submitted, paper or online, there are different deadlines. The latest deadline for submission of an online return is midnight on 31 January following the end of the tax year, and midnight on 31 October for submission of a paper return, and 30 December for those who wish HMRC to calculate the liability and automatically collect it from their income.

The Self Assessment return comprises the main tax form plus supplementary pages (schedules) for different types of income. There are different main returns for individual taxpayers, for Trusts and for Partnerships. Self Assessment customers in any of these groups need to submit a main return/tax form and supplementary pages/schedules as required.

If trustees and personal representatives meet the conditions for completing a Self Assessment return as outlined in section 3.1 ‘Source data’, they must complete the SA900 form entitled “Trust and Estate Tax Return”. There are also various supplementary Self Assessment pages which may need to be completed:

• SA901 - Trust and Estate Trade
• SA901L - Trust and Estate Income from Membership of Lloyd’s
• SA902 - Trust and Estate Partnership
• SA903 - Trust and Estate UK Property
• SA904 - Trust and Estate Foreign
• SA905 - Trust and Estate Capital Gains
• SA906 - Trust and Estate Non-residence
• SA907 - Trust and Estate Charities
• SA923 - Estate Pension Charges

Most of the information in this publication comes from data that has been provided by taxpayers on these Self Assessment forms.

The TRS registration deadline for registrable non-taxable trusts created prior to 6 October 2020 is no later than 1 September 2022. Registrable taxable trusts created on or after 6 April 2021 should register no later than 1 September 2022 (or within 90 days of trustees becoming liable to tax if that would be later). Further detail on deadlines are available in HMRC internal manual TRSM40010.

Trustees who dispose of UK residential property where CGT is due are required to file a return via the new CGT on UK Property service within 60 days of completing the disposal. This filing deadline was 30 days for transactions completed between the introduction of the service on 6 April 2020 and 26 October 2021. Under this system, trustees can submit multiple returns in a single year if they dispose of properties on different dates. The data from returns submitted using this system in the tax year ending 2021 and later years is included in tables 4, 6, 7 and 8 of the main publication. Before 6 April 2020, UK property disposals were reported through Self Assessment.

3.4 Data validation

For Self Assessment data, quality assurance processes are included in the operational processes and systems that collect the data. Further quality checks are added by analysts using the data for analytical purposes. These checks include manual and automated checking processes such as checking components of sums agree with totals and that labels for numbers or charts correctly relate to the bars in charts or numbers shown in tables. In addition, further checking is applied during the process of calculating the statistics published and reasonableness checks are carried out when new statistics are produced (for example, are they in line with previous figures, are they what one would expect given what has happened since, are there plausible explanations for changes?).

TRS registration data is put through an analytical data cleaning process prior to producing the TRS statistics in this release. Within this we exclude duplicate records for the same trust or estate, which may occur due to changes made to its details (for example name, address etc.) or connection issues when submitting returns. The first step of the cleaning process is to take the raw TRS data and identify all records linked to the same trust or estate by checking whether each record contains substantively the same information. We exclude duplicate records if we find the records contain substantively the same information as an included record. We only do this where the trust is non-taxable, not closed and the user submitting the information did not receive a successful confirmation from the web system. Where multiple records appear to exist for the same trust or estate, we use the most recent record only. We sometimes also exclude records with obviously wrong information such as invalid Unique Taxpayer Reference (UTR) numbers. Finally, we round the figures to the nearest 1,000 which reflects a degree of uncertainty in the number of open trusts and estates, as the cleaning process is unable to deal with all possible circumstances in which a trust or estate may be recorded more than once within the raw TRS data. We believe that taking these steps and mitigations mean that these aggregated figures meet the quality standards required to be badged as National Statistics.

The gains and Capital Gains Tax liability statistics in tables 4, 6, 7 and 8 for the tax years ending 2021 onwards also include returns data provided by trustees under the Capital Gains Tax on UK property system. This administrative data is of a high standard as Capital Gains Tax liabilities of trusts are derived from it. However, some errors which do not affect the Capital Gains Tax liability of trusts can be found on the tax returns. We exclude non-resident chargeable gains relating to the disposal of UK property from the chargeable gains statistics in this release. We will consider whether this can be included in this publication in future years.

3.5 Data compilation

We aggregate data using different trust types (section 2.4 ‘Statistical concepts and definitions’) derived from information provided on the SA900 form and other supplementary pages as described in section 3.3 ‘Data collection’. We use statistical software to extract, sort, filter and aggregate the data in order to produce the tables in the publication.

The statistics produced in tables 4, 6, 7 and 8 include data collected from all tax returns filed via Self Assessment as well as returns filed using the CGT on UK Property service. Self Assessment returns report annualised information for taxpayers’ disposals whereas taxpayers can file multiple CGT on UK Property service returns in a single year to report disposals completed on different dates. In order to combine the datasets relating to each reporting system, CGT on UK Property returns are aggregated by taxpayer to determine their annual chargeable gains position on this service. This information is then combined with returns filed via Self Assessment. Where a taxpayer has filed via both reporting systems, the information reported via Self Assessment is used as this includes all relevant capital gains made by the taxpayer in a given year. The process for including this new data source is experimental and subject to revision due to potential methodological refinements.

The latest years in all tables are more likely to be subject to revisions in future publications, so any arising trends should be treated with caution.

4. Quality management

4.1 Quality assurance

All official statistics produced by KAI must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority.

Analytical Quality Assurance describes the arrangements and procedures put in place to ensure analytical outputs are error free and fit-for-purpose.

Every piece of analysis is unique, and as a result there is no single quality assurance (QA) checklist that contains all the QA tasks needed for every project. Nonetheless, analysts in KAI use a checklist that summarises the key QA tasks, and is used as a starting point for teams when they are considering what QA actions to undertake. Teams amend and adapt it as they see fit, to take account of the level of risk associated with their analysis, and the different QA tasks that are relevant to the work. The quality assurance review checklist used to produce these statistics was last reviewed in September 2023.

The QA for this project adhered to the framework described in ‘Quality assurance’ and the specific procedures we took were as follows:

Stage 1 – Specifying the question

In the case of this release we have continued to produce statistics that continue to provide a long-term (and consistently measured) time series.

Stage 2 – Developing the methodology

We further developed historic methodology in collaboration with stakeholders and others with relevant expertise, ensuring it was fit-for-purpose and would deliver the required outputs.

Stage 3 – Building and populating a model/piece of code

We took the following step for building and populating the model/code:

• we produced analysis using the most appropriate software and in line with good practice guidance
• we checked data inputs to ensure they were fit-for-purpose by reviewing available documentation and, where possible, through direct contact with data suppliers
• we undertook QA of the input data
• we commissioned other analysts to check code and methodology

Stage 4 – Running and testing the model/code

We took the following steps for running and testing the model/code:

• we compared results with those produced in previous years and differences understood and determined to be genuine
• we compared results with comparable independent estimates where available (such as with Capital Gains Tax statistics), and differences investigated
• we ensured results were determined to be explainable and in line with expectations

Stage 5 – Drafting the final output

We took the following steps to draft the final output:

• we completed checks to ensure internal consistency (for example, totals equal the sum of the components)
• we had the final outputs independently proof-read and checked

At the start of a project, during the planning stage, analysts and managers make a risk-based decision on what level of QA is required. Analysts and managers construct a plan for all the QA tasks that will need to be completed, along with documentation on how each of those tasks are to be carried out and turn this list into a QA checklist specific to the project. Analysts carry out the QA tasks, update the checklist, and pass onto the Senior Responsible Officer for review and eventual sign off. These measures enhance the level of assurance and provide a clear audit trail.

4.2 Quality assessment

This background quality report assesses the quality of the statistics produced. In addition, we have conducted small scale investigations into specific areas of these statistics such as providing more detailed information on TRS registrations compared to previous publications.

5. Relevance

5.1 User needs

We know that tax policy of trusts and estates is of interest to policy makers in government, academics, researchers and journalists that have an interest in taxation. These statistics might also be of interest to individuals or organisations working in fields related closely to trusts and estates, for example accountants and other financial organisations.

We have seen a growing level of interest in the number of trusts registered with TRS, in view of the new registration requirements and associated registration deadlines. We have included more up-to-date information than we had previously included to better meet user needs.

Officials in HMRC and HMT use HMRC statistics to assess the effects of policies. The media may use them as background for commenting on policy changes initiated by the Government.

5.2 User satisfaction

HMRC are committed to providing impartial quality statistics that meet our customers’ needs. Contact details for the team are available in the bulletin in case users wish to provide feedback, comments or queries on our statistics.

Customers can also provide feedback directly to the contact detailed in the bulletin, via the contacts section on Statistics at HMRC.

5.3 Completeness

As mentioned in section 3.1 ‘Source data’, only trusts and estates with Income Tax or Capital Gains Tax liability are required to complete Self Assessment returns. Therefore, not all trusts and estates may be captured in these statistics. However, it is a legal requirement for qualifying trusts and estates to submit Self Assessment returns by the required deadlines. Penalties exist for non-compliance.

Penalties also exist for trusts and estates who fail to register with TRS by the relevant deadlines despite being required to do so (see section 3.1 ‘Source data’).

6. Accuracy and reliability

6.1 Overall accuracy

This analysis is based on administrative data, and we address accuracy by eliminating non-sampling errors as much as possible by adhering to the quality assurance framework.

The potential sources of error include:

• incorrect information being entered on Self Assessment tax return forms, TRS and the Capital Gains Tax on UK property system for the tax year ending 2021 onwards
• forms not being submitted by the required date
• mistakes in the programming code used to analyse the data and produce the statistics
• data processing errors

6.2 Sampling error

Samples are not used to compile the analysis, which is instead based on administrative data from HMRC’s CESA system or TRS. Sampling error is therefore not relevant.

6.3 Non-sampling error

6.3.1 Coverage error

As stated in section 3.1 ‘Source data’, trusts don’t need to submit Self Assessment returns if they don’t have any Income Tax or Capital Gains Tax liability. Any trusts or estates not completing Self Assessment returns will not be covered in this publication. Qualifying trustees and personal representatives are required to complete the Self Assessment tax return form SA900, with further supplementary forms if they meet certain criteria as outlined in SA900. Coverage error from these trusts are likely to be small.

Trusts with certain exemptions (section 3.1 ‘Source data’) were not required to register with the TRS by the 1 September 2022 deadline, so these trusts may not be fully captured in the published data.

Coverage error is also expected from late filing of Self Assessment returns; however, this is likely to be small and such information should be captured in this publication during later iterations. The data extracts are taken between August to September, which also helps to mitigate this error.

6.3.2 Measurement error

The main sources of measurement error can be categorised as respondent errors and includes trustees and personal representatives making errors when entering their information onto their Self Assessment tax return form, whether this is done on paper or electronically. Measurement error can also occur when information is submitted on the online TRS registration form and also when reporting disposals on the Capital Gains Tax on UK property system.

Self Assessment return data submitted electronically may not always flow through to the CESA system. This is because additional actions may be required because third party software used to submit returns may not be aligned with HMRC systems. Manual intervention is also required for returns submitted for earlier years (other than the latest year) or amendments to previously submitted returns. Upon reviewing the trusts data, we identified specific entries which reported substantially higher figures compared to the rest of the data. We excluded these entries from the data as this suggests that they are outliers. We cannot account for tax repayments from previous tax years, so we may be overstating the amount of tax payable by some trusts.

We described in section 3.4 of this report how we clean TRS registration records prior to producing figures for this publication. We expect this cleaning process, in aggregate, to reduce the level of measurement error, but some may remain. We believe the data cleaning and rounding strategy provides for figures that meet the quality standards required to be badged as National Statistics.

6.3.3 Nonresponse error

When analysing data for the latest available year, figures are not necessarily available for all trusts and estates due to late filing, as some may not have completed their Self Assessment return by the required date. Self Assessment non-response rates are generally low; we estimate the data to be more than 95% complete for the latest year and data from late-filed returns is usually captured in the following years.

We do not know the exact number of trusts required to register on TRS, so it is difficult to precisely assess the level of non-response error for this system.

6.3.4 Processing error

It is possible that errors exist in the programming code used to analyse the data and produce the statistics. We reduce this risk through periodically reviewing and testing the programs that we use. We used a substantially different production process in 2021, by moving from SAS and Excel-based programming to using R Studio and creating a ‘reproducible analytical pipeline’ (RAP). In 2023, we moved some remaining inputs to the RAP from SAS to R Studio. For each change to the production process, we compared the outputs of the new and old processes to ensure consistency of results.

6.4 Data revision

The latest years in all tables will be subject to revisions in future publications, so any arising trends should be treated with caution.

6.4.1 Data revision - policy

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions to official statistics.

6.4.2 Data revision - practice

The published figures include revisions for previous years. These revisions are normally small but reflect the latest position for trusts and estates, and any new data received since the previous publication.

We revise statistics in this analysis for the 3 to 4 years prior to the latest published year. The number of trusts and estates completing Self Assessment for the tax year ending 2021 has been revised upwards by 3.4% since last year’s publication, with Income Tax and Capital Gains Tax liabilities being revised upwards by 3.9% and 2.4% respectively. We provide a tabular summary of the changes in statistics due to revisions to earlier years in the main publication under the section entitled ‘Revisions strategy’.

The TRS statistics published last year (October 2022 release) included trusts and estates which had already closed in figure 1 and table 1. Such trusts and estates have now been excluded from figures in this release. Some figures up to and including the 12-month period ending March 2022 have decreased as a result. In general, trust and estate registration figures for earlier years are expected to decrease slightly with time as trusts and estates close.

As trusts that were not previously required to register with the TRS are now required to do so it is possible that there may be more changes in the underlying data than we have seen historically. Therefore, the TRS statistics for the 12 months ending March 2023 may be prone to future revisions and should be treated with caution.

6.5 Seasonal adjustment

Seasonal adjustment is not applicable for this analysis.

7. Timeliness and punctuality

7.1 Timeliness

We publish these statistics on an annual basis. They were first published in 2007. Since September 2019 onwards, this release has been published between September to October each year, while previous iterations of this release were released in January to February. This new timeline allows sufficient time for later filing of Self Assessment returns, processing the data, analysis and to complete quality assurance checks of these statistics when the data becomes available at the end of the tax year. For example, statistics for the tax year ending 2021 were published in October 2022, 10 months after the January 2022 Self Assessment filing deadline for the tax year. This improves the timeliness of the data.

Historically we have published TRS registration figures up to a similar time period as the latest period that was available for Self Assessment return data. We recognised the increased public interest towards TRS figures, so in October 2022 we published an additional year of TRS registration figures up to 31 March 2022 in addition to the figures up to 31 March 2021 that we would usually publish.

7.2 Punctuality

In accordance with the Code of Practice for Official Statistics, the exact date of publication will be given not less than one calendar month before publication on both the Publication plan for HMRC national statistics and official statistics and the Research and statistics calendar of GOV.UK. Any delays to the publication date will be announced at HMRC statistics announcements. Statistics for the tax year ending 2022 have been published in the same week of the year as the previous publication.

8. Coherence and comparability

8.1 Geographical comparability

This analysis is presented for a single region – the United Kingdom.

8.2 Comparability over time

The statistics show a long-term decreasing trend in the number of trusts and estates since the tax year ending 2004. There have been several policy changes during this period that may help explain why this trend has occurred, which are listed below. Some of the earlier changes may have induced a gradual change in behaviour which would mean the effects may still be seen in the current statistics.

• from the tax year ending 2005 the trust tax rate was increased from 34% to 40%, and it was again increased from 40% to 50% from the tax year ending 2011. This may have made trusts less attractive

• from the tax year ending 2014 the special tax rate for trusts was decreased to 45% partially reversing the increase to 50% in tax year ending 2011

• from tax year ending 2006 the standard rate band was introduced; the size of the band was £500 for that tax year and £1,000 from the following tax year. Those trusts with income consistently below £1,000 no longer needed to complete a Self Assessment tax return every year, if tax had been paid at source for example, bank interest

The statistics also show that dividend-type income from trusts paying tax at the special trust rate decreased substantially in the tax year ending 2017 from the previous year. This was due to changes in dividend tax policy from April 2016 onwards, which included an increase in the dividend tax rate by 7.5%, removal of the dividend tax credit and the introduction of the personal dividend allowance.

Late filing in the most recent years (last 3 to 4 years) means that the figures may not be fully comparable with earlier years, as the number of trusts and estates and their tax liabilities may be slightly underestimated for recent years.

From 6 April 2020, trustees who sell or otherwise dispose of UK residential property where Capital Gains Tax is due on all or part of the gain have had to report the disposal to HMRC within 30 days of completing the disposal, and at the same time make a payment on account of the CGT due. The filing deadline was extended from 30 days to 60 days for transactions completed on or after 27 October 2021. Before 6 April 2020, UK property disposals were reported through Self Assessment. We have used data from the Capital Gains Tax on UK property system along with Self Assessment returns to produce the chargeable gains and Capital Gains Tax liability statistics for the tax years ending 2021 onwards in this publication. However, it may not be fully comparable with previous tax years and must be treated with caution.

8.3 Coherence - cross domain

The data sources used for this publication are Self Assessment returns, TRS registrations and the Capital Gains Tax on UK property system. The interactions between these data sources have been explained in section 3.1 ‘Source data’. The data is presented on a tax year basis (or for a similar 12-month period in the case of TRS), which reduces coherence issues due to differences between sub-annual and annual statistics.

The amounts of chargeable gains and amounts of Capital Gains Tax are also published in table 1 of the Capital Gains Tax statistics. There are some slight differences between the sum of figures published in tables 4, 6, 7 and 8 in this publication and the figures published in table 1 of the Capital Gains Tax statistics. These differences in chargeable gains are mainly because the gains in this release show gains after deducting the Annual Exempt Amount (AEA), while the gains in the Capital Gains Tax statistics release are before deduction of the AEA. The magnitude of the differences in gains figures can vary across years depending on how much of the AEA was left unused by trusts and the number of trusts using up the full AEA in a given tax year. Differences in Capital Gains Tax figures mainly relate to the timing of production of statistics, availability of later data and rounding.

We publish statistics about trusts in both Statistics on trusts in the UK and Inheritance Tax liabilities statistics. The different data sources for each publication lead them to covering different sets of trusts each year, these depending on the circumstances of the individual trust.

Statistics on trusts in the UK is primarily based on data submitted as part of the annual SA process. This typically means that there were tax liabilities that arose from either income received, or distributed to beneficiaries, in a particular tax year. In recent years trusts and estates with only savings interest income and resulting tax liabilities of below £100 have received a concession which has removed them from Income Tax. This means this publication will not include trusts who are not receiving taxable income, for example, trusts which are holding assets for the longer term, or those receiving small amounts of savings income annually.

Inheritance Tax liabilities statistics for trusts are based on data submitted in Inheritance Tax returns which cover assets being: * put into trusts (entry charges) or * held within trusts (at ten year anniversary charges) or * removed from trusts (exit charges)

There are some instances where the value of trust assets is included in the estate of the deceased. For more information, please see the HMRC guidance on dealing with a trust when someone dies. However, Inheritance Tax statistics focus on trusts which have a tax liability so will not include trusts with valuations below the nil rate band for Inheritance Tax. Trusts paying out income will not necessarily generate an exit charge, but if that income is converted to capital it will become subject to ten year anniversary charges or exit charges if paid out to a beneficiary.

8.4 Coherence - internal

Rounding of numbers may cause some minor internal coherence issues as the figures mentioned in the commentary or presented within tables may not sum to the totals displayed, while percentage change figures and proportions are calculated using unrounded numbers.

The amounts of money shown in the tables have been rounded to the nearest £5 million, while numbers of trusts and estates in TRS-derived tables have been rounded to the nearest 1,000 and to the nearest 500 in all other tables (except for the lowest income categories in tables 3 and 5).

9. Accessibility and clarity

These statistics can be found in the Trusts Statistics section on GOV.UK. The publication consists of figures, tables and commentary presented as pages on GOV.UK and Open Document Spreadsheet format. There is no further published micro-data. This publication is produced in line with accessibility requirements.

Any enquiries in accessing HMRC data should be directed to HMRC Datalab. More information on availability of HMRC data and how HMRC data can be accessed found on the HMRC datalab.

Email: HMRC Datalab

Useful links

Tax rates for different types of trusts.

Trust and Estate Tax Return (SA900) and Supplementary Pages.

Research and statistics includes all publications by HMRC as well as other government bodies.

10. Cost and burden

We compile these statistics from Self Assessment returns which are primarily designed to ensure that trusts and estates pay the correct amount of tax. Analysis of this data is a necessary end of its own to understand this segment of the tax base and develop more efficient taxation policy. Therefore, there is minimal additional cost to producing these statistics and provides for them to be released in an orderly and planned way.

Publishing this data also achieves a public good to understand the contribution that this segment of taxpayers makes to public funds.

We continually look for ways to improve and streamline the production of our statistics. We have moved towards the use of RAPs, which are automated statistical and analytical processes. They incorporate elements of software engineering best practice to ensure that the pipelines are reproducible, auditable, efficient, and high quality.

11. Confidentiality

11.1 Confidentiality - policy

HMRC has a legal duty to maintain the confidentiality of taxpayer information. Section 18(1) of the Commissioners for Revenue and Customs Act 2005 (CRCA) sets out our duty of confidentiality.

This analysis complies with this requirement.

11.2 Confidentiality - data treatment

We present statistics in this release produced by aggregating individual trust and estate returns information.

The increased accessibility of data due to the internet and modern information technology translates into higher risk of identifying individuals from published statistics. Therefore, HMRC has policies in place to ensure that there is sufficient protection of the privacy of individuals contributing to official statistics yet still ensuring the statistics are adequate, robust and accurate. Statistical disclosure control (SDC) concerns safeguarding the confidentiality of the information that HMRC holds about people and businesses. It ensures that units and their attributes in a data release are not identifiable. These techniques can be applied to a variety of outputs.

SDC involves modifying the data so that it becomes sufficiently difficult to identify individuals. At a basic level, this involves removing information by not including it in a table, increasing the scope of the variables (for example, measuring the range of repayments as being between (1 and 100 not between 1 and 10). Disclosure control methods attempt to find an optimal balance between the improvement in confidentiality protection and the reduction in data quality. We have conducted disclosure checks on the statistical tables in this publication. It is difficult to identify individuals in these statistics as they relate to trusts and estates rather than taxation of individual persons. Moreover, the income bands in tables 3 and 5 have been made sufficiently large in order to ensure that individual trusts and estates cannot be identified.

As we present data at an aggregate level, that provides a level of disclosure control, as it would make it impossible to identify any data belonging to an individual and reduce the risk of dominance. Statistics on the number of trusts are rounded to the nearest 500. Where the number of trusts is between 0 and 500, as observed for the ‘less than 0’ income band in tables 3 and 5, the number of trusts is displayed as ‘<500’.

Income, chargeable gains and tax amounts have been rounded to the nearest £5 million or displayed as ‘<5’ where the value is less than £5 million.

Our confidentiality and access policy and pre-release policy are both available on GOV.UK, along with a list of those who have pre-release access to this publication.