Currently many small trusts do not have to file a self assessment tax return with HMRC.
The new rules for banks and building societies to pay interest gross from 2016/17 mean that some trusts will be faced with the prospect of having to notify HMRC, complete a tax return and pay income tax for the first time.
Not only will this increase the administration for the trustees, but also for HMRC.
HMRC has recognised the problem and have announced that no notification will be required for 2016/17 from trustees or personal representatives dealing with estates in administration where the only source of income is savings interest and the tax liability is below £100.
Further details are to come, but this is a welcome relaxation from HMRC.
If you have any queries, or would like to discuss this further, please contact David Nash, Partner or Sarah Gray, Senior Tax Manager on 01788 539000.