Changes to the UK's Automatic Exchange of Information (AEOI)

There have been recent changes to the UK’s AEOI (Automatic Exchange of Information) regulations, which affect UK trustees whose income derives mostly from investments that are managed on a discretionary basis by a financial institution.  These new regulations require the trustees of such trusts to register directly with HMRC for AEOI purposes by 31^st December 2025.

Historically, UK trusts would only have needed to register and report for AEOI purposes if they had individuals connected with the trust who were non-UK tax-resident individuals.

It is our understanding that trustees, provided their investments are held in a discretionary portfolio (i.e. one where the investment manager has authority to make changes without the trustees’ consent), must now complete AEOI registration with HMRC, regardless of whether there are any non-UK tax-resident individuals connected with the trust. Provided the trustees are not making distributions to a non-UK tax-resident beneficiary, we understand that the registration will be a ‘one-off’ exercise.

Please note that, although this AEOI registration needs to be submitted to HMRC, it is a separate compliance requirement from HMRC’s Trust Registration Service (TRS) and from the filing of any trust tax returns.

If you are a trustee of a trust which holds an investment, you will need to speak with your financial advisor to establish whether:

• 50 per cent or more of gross income is derived from investing or trading in financial assets. Financial assets for these purposes include most financial investments (e.g. stocks and shares, debts, investments in funds and other investment vehicles) but not real property.
• If these are managed on a discretionary basis.

If both conditions are met, you must complete an AEOI registration.  Penalties may apply for non-compliance.

Further guidance