Lexefiscal

From 1 April 2023, expanded reporting requirements are in effect for the Trust Registration Service (TRS). HMRC has updated its guidance on reporting a trust discrepancy to reflect money laundering regulations SI 2022/860, which came into force on 1 April 2023.

A relevant person must now ask for a trust’s proof of registration when either:
• a trustee or agent of the trust approaches them to set up a new business relationship, or;
• as part of ongoing monitoring, they are required to check the details of trusts with which they have an existing business relationship.
Only material discrepancies need to be reported; this does not include small spelling errors or slight differences in the trust name provided that the trust is identifiable from the trust name on the TRS.

If you have any questions regarding the changes to reporting requirements for Trust Registration Services or how it may affect your existing Trusts, please do not hesitate to get in touch with us at LEXeFISCAL.

Forthcoming Research and Development (R&D) tax relief reforms by the UK government are unlikely to succeed in preventing spurious claims, a parliamentary inquiry has found. The last report is critical of fresh compliance changes for R&D tax relief, arguing that they lack focus and would be ineffective “in isolation”.

Based on this report, the following reforms are proposed, which may soon be adopted:
1) Among the reforms are the requirements to provide more detail regarding R&D tax relief claims, name any tax adviser involved, and have the claim endorsed by a senior officer of the company.
2) The way the system works at the moment is HMRC first pays out and then investigates afterwards. This can be changed by paying after review from HMRC.
3) The report is also critical of the government’s proposal to refocus relief activity to expenditure in the UK rather than offshore. Instead, the sub-committee argues for a form of “transitional relief expenditure” for specialised resources not currently available in the UK.

If you use R&D tax relief, we recommend that you carefully review R&D tax incentives and your tax records before the next Financial Bill. If you have any enquiries or struggle with any issues, do not hesitate to contact us

In response to the EU’s concerns, the Hong Kong government has indicated its commitment to amend its foreign-source income exemption regime. It is planned to bring the changes into effect from 1 January 2023. Thereafter offshore passive income may be taxed in Hong Kong.

The income will be taxed if
• it is received by a constituent entity, and
• such entity fails to meet the economic substance requirements (for non-IP passive income), the nexus approach (for IP income) or the participation exemption (for dividends and equity disposal gains).
If your tax structuring involves Hong Kong entity it is highly recommended to check if there are any options to mitigate tax risks.