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HMRC internal manual

Trusts, Settlements and Estates Manual

Introduction to trusts: new trusts: trust with no likelihood of income or gains

A trust may have no income, and no likelihood of income or gains. There is no point in issuing an annual SA return.

New trust

The trustees of such a trust need not notify the trust office of the existence of the trust. However, where the trustees do so and it is decided not to set up an SA record any correspondence should be saved electronically and the original destroyed, in accordance with the retention and storage policy that has been developed for these types of cases.

Existing trust

The trustees can ask that the trust office either

  • closes the record for the trust or
  • does not issue annual SA returns.

If the trust office agrees the application, it will not issue annual returns. It may review the position periodically. If exceptionally the trust office decides for any reason to issue a return, the trustees must complete it.

The trustees still have a legal responsibility to notify the trust office of chargeability to income tax and/ or capital gains tax for any year for which no return is issued.

HMRC may not know about such a trust that, for example, holds only an insurance policy. But the trustees might be within the scope of the chargeable event gains legislation (TSEM3210).