Taking on a trust client

By Tolley
Taking on a trust client

The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Taking on a trust client
  • Initial enquiries
  • Engagement terms
  • Money laundering and identity checks
  • HMRC and Trust registration
  • Legal entity identifier
  • Other agents

This guidance note looks at practical considerations in taking on a trust client.

In acting for a trust, tax practitioners may find themselves in the role because they are themselves the trustees, and they have been involved in the creation of the trust. More likely, however, is that they act as advisers to the trustees who have approached them after the trust has been set up. A third option is that they are engaged by other professionals such as solicitors, who need a trust tax specialist to deal with annual accounts and tax returns.

Whatever the situation, many of the considerations are the same, but this guidance note focuses on the role of the accountant or tax practitioner who is acting directly for the trustees.

Initial enquiries

An initial meeting should be with one or more of the trustees, and may also include other parties such as the settlor, beneficiaries or other relatives.

The first priority is to find out what the trust is for and how it has been managed to date. It is not at all uncommon for lay trustees to have misunderstood the terms of the trust so it is always helpful to have sight of the trust instrument at the earliest opportunity to facilitate a meaningful discussion. Information about previous management is essential, and you will need to know what records are available.

Secondly, you need to establish what you are being asked to do, and what needs to be done. These two propositions are not necessarily the same thing.

Unfortunately, new trust clients often come with a backlog of neglect and mistakes. You can rarely estimate the scope of the job at the outset. The proposed engagement may appear to be straightforward but further investigation reveals a great deal of initial work is required. This is more often the case with trusts than

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