Trusts data shows slight uptick in number of trusts submitting tax returns
Trusts data shows slight uptick in number of trusts submitting tax returns
After long term decline in use of trusts, recently announced IHT changes could lead to renewed interest
New figures released by HMRC show that the total number of trusts that submitted Self Assessment tax returns in the tax year ending 2023 increased slightly by 0.3% versus the previous year, arresting a long-term downward trend.
There were 147,000 trusts and estates submitting Self Assessment returns in the tax year ending 2023. Although this was a slight uptick over the previous year, it is set against a 9% decline since 2017 when there were 161,000.
The total income of all trusts and estates in the tax year ending 2023 was £3,115 million, a year-on-year decrease of around 2% from £3,185 million.
The total Income Tax and Chargeable Gains Tax Payable on trusts and estates in the tax year ending 2023 was £1,580 million, a decrease of around 16% from the previous year, primarily driven by a 27% fall in Capital Gains Tax.
Elsa Littlewood, a private client tax partner at BDO said:
“The latest figures show a slight uptick in the number of trusts submitting tax returns in the tax year ending 2023, but this is set against a long-term decline.
“Over the last several years, the increase in compliance and reporting requirements has led to a general decrease in the use of trusts.
“However, for some people, there are still good reasons to consider using a trust - for both non-tax and tax reasons. Trusts still offer families an effective means of passing wealth down the generations whilst providing protection for marital breakdown, family disputes, bankruptcy and beneficiaries who may be unable to manage their own affairs.
“Given recent Budget announcements on inheritance tax, we would expect to see an increase in the use of trusts in future years because placing a business or assets into trust can be a good way to ensure the continuity of the family business.
“The recently proposed changes to agricultural and business property relief look set to take effect from April 2026. What won’t change, however, is the desire of family business owners and farmers to pass on commercially sustainable businesses to the next generation.
“Farmers and business owners have some time between now and April 2026 to consider their position and, for many, making lifetime gifts will become a larger part of their succession planning – which often means using a trust.”
ENDS
Note to editors
About BDO
Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.
The organisations we work with are Britain’s economic engine; entrepreneurially-spirited, high-growth businesses that fuel the economy.
We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.
BDO LLP
BDO LLP operates in 18 offices across the UK, employing 8,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 166 countries and territories, with more than 115,000 people working out of 1,776 offices worldwide. It has revenues of US$14bn.
Contacts
Frank Shepherd
frank.x.shepherd@bdo.co.uk
07812 463601
New figures released by HMRC show that the total number of trusts that submitted Self Assessment tax returns in the tax year ending 2023 increased slightly by 0.3% versus the previous year, arresting a long-term downward trend.
There were 147,000 trusts and estates submitting Self Assessment returns in the tax year ending 2023. Although this was a slight uptick over the previous year, it is set against a 9% decline since 2017 when there were 161,000.
The total income of all trusts and estates in the tax year ending 2023 was £3,115 million, a year-on-year decrease of around 2% from £3,185 million.
The total Income Tax and Chargeable Gains Tax Payable on trusts and estates in the tax year ending 2023 was £1,580 million, a decrease of around 16% from the previous year, primarily driven by a 27% fall in Capital Gains Tax.
Elsa Littlewood, a private client tax partner at BDO said:
“The latest figures show a slight uptick in the number of trusts submitting tax returns in the tax year ending 2023, but this is set against a long-term decline.
“Over the last several years, the increase in compliance and reporting requirements has led to a general decrease in the use of trusts.
“However, for some people, there are still good reasons to consider using a trust - for both non-tax and tax reasons. Trusts still offer families an effective means of passing wealth down the generations whilst providing protection for marital breakdown, family disputes, bankruptcy and beneficiaries who may be unable to manage their own affairs.
“Given recent Budget announcements on inheritance tax, we would expect to see an increase in the use of trusts in future years because placing a business or assets into trust can be a good way to ensure the continuity of the family business.
“The recently proposed changes to agricultural and business property relief look set to take effect from April 2026. What won’t change, however, is the desire of family business owners and farmers to pass on commercially sustainable businesses to the next generation.
“Farmers and business owners have some time between now and April 2026 to consider their position and, for many, making lifetime gifts will become a larger part of their succession planning – which often means using a trust.”
ENDS
Note to editors
About BDO
Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.
The organisations we work with are Britain’s economic engine; entrepreneurially-spirited, high-growth businesses that fuel the economy.
We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.
BDO LLP
BDO LLP operates in 18 offices across the UK, employing 8,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 166 countries and territories, with more than 115,000 people working out of 1,776 offices worldwide. It has revenues of US$14bn.
Contacts
Frank Shepherd
frank.x.shepherd@bdo.co.uk
07812 463601