You will be aware of the new regulations introduced in October 2013 which have changed the way Trusts are taxed as well as having implications for accounting. Have you acted upon the changes required under the Unauthorised Unit Trusts (Tax) Regulations 2013?
Of primary concern is that a UUT must now seek approval from HMRC to be an Exempt Unauthorised Unit Trust (EUUT). This approval must be made prior to the end of the first accounting period ending after 6 April 2014. Therefore a UUT with a December year end will need to seek approval from HMRC before 31 December 2014, a deadline which is fast approaching. Approval should be sought on form CISC11, available on the HMRC website. In addition there are rules governing the taxable profits to include in the transitional year’s Tax Return, which in many cases will be the tax year 2013/14. Have you prepared your 2013/14 tax return on the correct basis?
From an accounts perspective, the UUT’s accounts for the first period for which approval is sought, accounting periods ending after 6 April 2014, and all subsequent periods, must be audited and prepared under IMA SORP (Investment Management Association’s Statement of Recommended Practice) and the UUT must make an annual declaration to HMRC (on form CISC 12) alongside their tax return declaring that they are still compliant with the EUUT regulations. Have you considered the audit and accounts disclosure requirements?
If you have not yet considered the application of the new rules then we advise you to do so as soon as possible. For help or advice on the tax, audit or administrative issues please contact Charlotte Ayres or your usual Moore Stephens contact.