Trustees and the PSC Register

From 6 April 2016, virtually all UK incorporated companies (and LLPs, but in this blog I’ll refer to companies only) will have to maintain a register of individuals or entities who control them.  As a result, individuals who either own, directly or indirectly, more than 25% of the shares or voting rights of such companies, or who hold the right to appoint or remove a majority of directors or have the right to exercise, or actually exercise, significant influence or control over the company may receive a notice from the company requiring them to provide information for inclusion on the People with Significant Control (PSC) Register. 

Trusts (UK or offshore) are caught by these new provisions too because the law provides that, if the trust were to be regarded as an individual and, as such, would satisfy any of the above conditions, then those persons who exercise, or have the right to exercise, significant influence or control over the trust are PSCs that need to appear on the company’s PSC Register.

New dividend taxation rules: what trustees should be doing

The taxation of dividends is set to change in the new UK tax year beginning 6 April 2016.  The 10% dividend tax credit will go, replaced by a new £5,000 dividend allowance that permits the first £5,000 of an individual’s dividend income to be taxed at 0%. Dividends will still sit as the top slice of the individual’s income, so if the dividend would otherwise be taxed at the higher or additional rate of Income Tax (IT) but for the dividend allowance, the allowance gives the individual 32.5% or 38.1% tax relief.  Individuals with significant dividend income have little to cheer about, though, as the allowance is paltry.  Much less has been written about the effect that all this has on trustees, who are not taxed as individuals for IT purposes.  How are trustees going to fare and what planning steps should they be considering?