05/09/22

IRELAND: Tax authority suspends non-registration penalties for UK trustees until registration is simplified.

As published on step.org/industry-news, Monday 5 September, 2022.

The Republic of Ireland's tax authority has told trustees of UK trusts holding Irish offshore bonds that they need not register on Ireland's Central Register of Beneficial Ownership of Trusts (CRBOT) for the time being, because of technical problems with the register.

The CRBOT was launched in August 2022 to meet the trust transparency demands of the EU Fifth Anti-Money Laundering Directive. It soon emerged that the many UK trusts that hold offshore investment bonds issued in the Republic of Ireland are deemed to have a 'business relationship' in that country: a criterion for registration on CRBOT. The initial deadline date to register details of the beneficial ownership of a trust on the CRBOT was 23 October 2021 for trusts that were established on or before 23 April 2021. Trusts established after that date must register within six months of establishment of the trust. They also have to register with the UK Trust Registration Service.

However, UK trustees face difficulties in registering on CRBOT. In order to do so, they first have to register with the Office of the Revenue Commissioners of Ireland’s (the Revenue’s) online service, which requires them to already have a unique identifying number called a TAIN. Non-residents of Ireland have typically not been issued with an Irish tax number.

The Revenue has recognised the problem for UK trustees. Its latest guidance says it is working on simplifying access to the CRBOT for such trustees or their representatives and it will not levy penalties on UK trustees for non-registration in this interim period. It says UK trust representatives who have not yet applied for a TAIN now need not do so, although those who have already submitted a TAIN application will soon receive confirmation that their application has been received.

The Revenue has noted that updated instructions on how to register for the CRBOT will be available on its website in due course.

The CRBOT legislation (SI 194/2021) also extends to trusts outside the Republic of Ireland that hold land or other real property in Ireland. The Revenue's document provides further guidance for UK trustees or their representatives on whether they have to register on CRBOT. However, UK trustees that have a relevant trust registered in another EU Member State are not required to register with the CRBOT, as long as the trustee has filed the relevant information on the central trust register in another Member State and has a certificate proving this.