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HMRC internal manual

VAT Registration

Entity to be registered: trusts and pension funds: registration of trusts and trustees

The majority of trusts will be registered under the VAT Act 1994, section 46 and be subject to VAT Regulations 1995, regulation 8 which makes all members jointly and severally liable for anything required to be done by or under the VAT Act 1994 and the regulations made under it.

Trusts registered under the VAT Act 1994, section 45 (partnerships) will be subject to VAT regulations 1995, regulation 7 and the Partnership Act 1980 which makes all partners jointly and severally liable for the actions of the partnership.

For all practical purposes there is little difference between the two.

As a matter of best practice, we should, from the outset, have all the names, addresses and other particulars of all those concerned in the management of the trust business. If we don’t know who all the trustees are, we can not be satisfied that we are registering the correct person. Furthermore, we need to ensure that those who are being held out as trustees accept the position and the responsibilities and obligations that it entails.

Where the trust is registering as a partnership under section 45 of the VAT Act 1994, a VAT 2 should be completed by all the trustees. However, we can not insist on this where the trust is registered under section 46 because to do so would mean asking the trustees to hold themselves out as partners.

The VAT 1 must be signed by one of the trustees. Where you have a bank acting as a trustee, you should accept the signature of the manager as that of an authorised signatory.

The registration of a trust is to be raised in the names of the trustees and the trust for which they act. For example, ‘John Brown and Adam Smith as trustees for Joseph Bloggs (deceased)’ or ‘John Brown and Adam Smith as trustees for Southside estate’, or ‘BH Bank Plc as trustees for Frederick Bloggs’.