SAM123001 - Returns: trust returns: introduction

SA returns are issued for the majority of cases for which a taxpayer record exists. Most of the returns are issued automatically but others are issued manually. Those which need to be issued manually appear on the ‘Returns Review’ work list. This list is generated in each office with processing responsibility to enable the returns to be issued at the correct time. More information on issuing returns is available in section ‘Returns Issue’ of the SA Manual.

The majority of Trust and Estate returns will be issued and received by the Trust Offices but Network Offices may receive returns which

  • Are sent to the wrong address or
  • Because it is more convenient, are sent to the local office rather than to the correct one

Network Offices will also receive returns which they have issued in respect of a period of administration which is not followed by a trust.

The other type of return covered in this section of the SA Manual is the Tax Return for Trustees of Registered Pension Schemes.

The return must

  • Be electronically filed, or be on the HMRC paper form, or be a computer generated version which is identical to the official HMRC form.
  • Be signed by the correct person, including a person acting in any capacity
  • Include all supplementary pages indicated on the return as being necessary.
    Note: A spreadsheet, table or list providing details which should be on separate supplementary pages (multiple trades or partnerships) is not acceptable

Initial action in all cases
Trust and Estate returns
Tax Return for Trustees of Registered Pension Schemes

Initial action in all cases

Upon receipt all returns must be reviewed to establish that they are satisfactory and if so, the date of receipt must be stamped on the returns and returns must be logged on the day of receipt using function LOG RETURN. If the return is unsatisfactory, do not log the return. For further information see subject ‘Unsatisfactory returns’ at SAM121260.

A return should be logged in the office in which it is received, provided that office has the LOG RETURN function available on Local Data Capture (LDC). The return must then be sent as soon as possible to the current office with processing responsibility.

Other clerical reviews are required on receipt of the return as follows

  • To consider whether any action is required immediately, for example to deal with correspondence received with the return. Any payments received with the return should also be extracted, payslips prepared and forwarded, and the return noted

And

  • To identify any changes to the trust’s or pension scheme’s details to enable the SA trust record to be updated

Following the initial review of the return further action is required to identify unsatisfactory returns. Further information on an unsatisfactory Tax Return for Trustees of Registered Pension Schemes is available in subject ‘Processing the Pension Scheme Tax Return’ (SAM123330).

An unsatisfactory return should be sent back to the trustee or agent who submitted it regarding omissions.

Where an agent is acting, a letter should also be issued to the other party notifying them of the action taken. If, in a case where an agent is acting, it is not possible to tell who submitted the return, it should be sent back to the trustee as it is their ultimate responsibility to ensure that a satisfactory return is submitted.

Notes:

1. Unsatisfactory returns received on 1 November should be treated in the same way as those received in the period 10 to 31 October. This is to correspond with the fact that, since October 2011, a return received on that date is considered to be late and will attract a penalty

2. Where the return has been received prior to the filing date but is being returned as unsatisfactory within21 days before the filing date, a period of 21 days is given to allow a satisfactory return to be submitted. A period longer than 21 days should be allowed in certain exceptional circumstances, for example overseas addresses or UK geographical areas where there are known longer postal times

If the information is not supplied within 21 days automatic penalties will apply

Additionally you need to check that the details of the trustees are correct and make any changes using functions MAINTAIN CAPACITY SUMMARY and MAINTAIN CAPACITY

Information regarding action on receipt of SA returns for an out of date year, for which capture is no longer possible using Technical Support System, is available at subject ‘Returns for out of date years: Trusts’ (SAM123100)

Notes continued:

3. It is important that you capture all relevant entries on the return as fully as possible and do not omit figures from return boxes simply because the system will allow you to do so. This is because even where a box does not affect the calculation of the liability, the information is used for statistical, compliance and other purposes. Also, what you capture on the system needs to provide as complete a picture as possible for other staff to view

4. Where a return has not been identified as for a case where you are not the responsible office (an ‘Away’ return) at the pre-capture stage, the return should be fully captured in the office of receipt. After full capture the return should be redirected to the responsible office and an SA Note made to record the action taken. On receipt in the responsible office, the return should be passed directly for 2nd day actions that may be required before being allocated a batch number and stored

Trust and Estate returns

The processing of the Trust and Estate return can be broken into four distinct areas

  • Action to take on receipt of the return
  • Preparing the return for entry in Technical Support System (TSS). The SA Pension or SA Trust programmes on TSS are allocated by the Local Administrator and accessed through Single Point Security (SPS)
  • Entering the return information into TSS

And

  • Actions following receipt of the printout from TSS

If the return is for a bare trust, (box 0.01), and there is no likelihood of any tax being due from the trustees year on year, you should make the SA record dormant. Further information on bare trusts is available in subject ‘Bare Trusts’ in this section.

The return that you receive in the majority of cases will be the paper return that was issued. All paper returns received are treated exactly the same.

Trust returns can also be submitted over the Internet. Trust returns will not be logged or checked by the system when they are received, nor will information from them be passed to the mainframe systems. It will be necessary for Trust returns received by Internet to be logged on SA and captured using the SA Trust Return application, in the same way as a paper return.

Offices will receive online lists of Trust returns filed over the Internet on a daily basis to enable them to manage the work and arrange for the printouts for entering in the TSS.

After logging receipt you need to check that the return profile is correct by comparing the return received with what was actually issued. If necessary use function MAINTAIN RETURN PROFILE to amend the details.

Note: The return profile is automatically updated following the capture of the return on TSS.

A TSS application is available to Trust Offices to help with the calculation of the tax liability, and to check the calculations made by the trustees.

Note: Following calculation of the SA liability, the charge is passed automatically from TSS to SA. The taxpayer’s telephone number is also updated automatically following return capture.

Tax Return for Trustees of Registered Pension Schemes

Local Data Capture (LDC) is used to log receipt of the return. After the return is logged the return details are entered in TSS which is available to help with the calculation of the tax liability, and to check the calculations made by the trustees.

In Revenue calculation cases the tax calculation will be blank and you must calculate the liability using TSS or manually using the working sheet in the return.

A self calculating taxpayer will complete a Tax Calculation Guide SA976.

The liability should be entered on the SA record using function CREATE RETURN CHARGE.