Long-term decline in number of UK trusts continued last year
However, trusts' total declared income for the year rose 12 per cent to GBP2.73 billion year-on-year. Chargeable gains were unchanged at GBP3.23 billion, although chargeable gains made by trusts paying tax at the special trust rates fell by 3 per cent to GBP1.445 billion. Gains made by interest in possession trusts (IIPs) were unchanged at GBP1.455 billion.
The total tax bill was GBP1.32 billion, roughly equally split between income tax and capital gains tax. Of the GBP675 million paid in income tax, GBP140 million arose from the 49,000 IIPs, and GBP495 million from the 86,500 trusts taxed at the special trust rates. The rest came from charities and other trusts, and from estates. Income tax paid by trusts taxed at the special trust rates rose by 14 per cent, partly recovering the sharp fall seen in the previous year. This change is mostly due to variations in levels of dividend income, according to HMRC.
Only 3,000 trusts received more than GBP100,000 in income during the year, but those that did accounted for nearly 60 per cent of the sector's total income.
The Trust Registration Service had 107,5000 registrations as of 5 March 2019, an increase of 22,500 on the previous year. This number is expected to increase sharply in January 2020, when it becomes mandatory to register all trusts, regardless of whether or not they have tax consequences.
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