What is the background to AEOI?
AEOI is an initiative by the Organisation for Economic Co-operation and Development (OECD) to exchange information between participating international tax authorities on financial accounts held by taxpayers in another participating country to increase tax transparency and reduce global tax evasion.
Information is exchanged through the Common Reporting Standard (CRS) and/ or the USA’s Foreign Account Tax Compliance Act (FATCA). There are currently 126 participating countries that exchange information on taxpayers with HMRC.
The UK obtains this information by requiring certain financial organisations to register under the Automatic Exchange of Information (AEOI) Regulations. The scope of these regulations has recently been extended and it will now apply to more organisations, including certain trusts and companies.
Which trusts, companies and other organisations will be affected by these rules?
Mainly trusts and companies that hold investments that are affected.
A trust, company or partnership which falls within the definition of a Financial Institution under either the CRS and/ or FATCA needs to register for AEOI.
A trust that is a Trustee-Documented Trust will also need to register.
The timescales for registration are very tight with a deadline of 31 December 2025 for existing trusts.
So, when is a trust a Financial Institution?
A trust will be a Financial Institution (FI) if it satisfies the “investment entity” test. This will be the case if:
- The trust runs a business in the UK and more than half of its income comes from activities such as trading in financial instruments, portfolio management and/ or managing investment funds; or
- More than half of the trust’s income comes from investing (or trading) in financial assets and the trust’s assets are managed by a UK business that carries out those activities.
For most trusts, the second category will be most relevant and whether a trust will be required to register is determined by two questions:
- Does 50% or more of the trust’s income come from investments; and
- Have the trustees engaged a discretionary fund manager (DFM) to manage the investments?
If the answer to both of these questions is yes, the trust is a Financial Institution for the purposes of AEOI and will need to be registered.
Does the FI test apply only to trusts?
No. FI has a very broad definition and could apply to entities such as partnerships and companies. So, for example, a Family Investment Company (or Partnership) may need to register if at least 50% of its income is investment income with those investments managed by a DFM.
What is a Trustee-Documented Trust?
The other category of trust that may need to be registered is a Trustee-Documented Trust (TDT). This is also a trust with more than 50% of its income derived from investments but, to be a TDT, one of the trustees will be a FI itself, typically a corporate or professional trustee. If the corporate or professional trustee has agreed to take on reporting responsibilities for the trust, the trust will not be considered to be a FI for the purposes of CRS or FATCA. It will, however, still need to register with HMRC under AEOI.
Are there any exemptions or exclusions from these requirements?
Trusts already registered for AEOI are clearly not affected.
Charities, registered pension schemes and trusts of offshore investment bonds do not currently need to register.
Also, the practical outcome of the rules is that trusts that predominantly hold property, loans or life insurance policies do not currently need to register.
How does this affect trusts that invest in investment bonds or collective investments?
IEIM400820 provides guidance on the cases where the trust will need to register because a FI manages the financial assets of the trust. “A FI manages the financial assets of the trust where it has discretion to manage the investments or investment strategy for the assets. This will normally be the case where the trust has appointed a discretionary fund manager (DFM) to manage the investment portfolio. The appointment of the DFM will be evidenced by an agreement between the parties that provides for discretionary management.”
This raises the question of whether registration is necessary where the trustees, having invested in an onshore or offshore investment bond, merely nominate the DFM but the appointment (and subsequent legal agreement) is between the insurance company (as owner of the assets), and the DFM.
Where the trustees invest in collective investments, they will need to appoint the DFM, and so if investment income exceeds 50% of the income of the trust, the trustees will need to register.
In cases where no DFM is appointed, it would seem that trustees investing in an investment bond or collective investments will not need to register. In that respect IEIM400820 states as follows: “Where the trustees of a trust invest in retail investments and the trustees make the decision on what investments to make, the arrangement will not amount to discretionary management”.
We are clarifying the position on these areas with HMRC.
How has the position on AEOI changed?
Previously, the rules were quite limited in terms of which FIs and TDTs needed to register with HMRC for AEOI. In general, this only applied to a FI which had a non-UK resident settlor, trustee and/ or beneficiary. TDTs did not need to report because their corporate trustee would register to make the report for them.
Now the scope of the trusts that need to register has been extended. In effect, all FIs and TDTs must register with HMRC directly – even if they have nothing to report.
What is the main impact of these changes?
There will be a number of existing trusts that are FIs but not registered for AEOI. These changes will mean those trusts will need to register for AEOI and mean that HMRC will have information on all FIs.
Registration for AEOI is in addition to any requirements to register on the Trust Registration Service (TRS) or other jurisdictions’ trust registers (such as CRBOT in Ireland). These trust registers are anti-money laundering and anti-financing of terrorism initiatives, whereas AEOI is targeted at tax compliance.
When must trusts be registered by?
FIs must register with HMRC for AEOI purposes by the later of:
- 31 December 2025; or
- 31 January following the calendar year in which the entity becomes a FI that needs to report or a TDT.
Once a trust is registered, there is no need to make nil-returns each year.
Why is the deadline so short?
The UK legislation requiring registration for AEOI was passes in July 2025 but was not widely communicated. HMRC released its guidance on 4 December 2025 which brought these requirements into the limelight.
A number of professional bodies have made representations to HMRC to extend the deadline but HMRC has rejected these stating that it is not possible to change the deadline due to its international obligations.
Are there any penalties for not registering?
There is a £1,000 penalty for failing to register with a £300 continuing daily penalty after a notice of the penalty has been issued. However, HMRC has stated that late penalties will not apply if there is a reasonable excuse for the delay in registering.
Those needing support in registering or who cannot meet the deadline can contact HMRC at enquiries.aeoi@hmrc.gov.uk. HMRC has also provided a telephone number 03000 576 748 to answer queries around financial institutions and AEOI.
What action is necessary for affected trusts?
Having confirmed that their trust is a FI and registered for AEOI, trustees need to confirm the residence status of the settlor, trustees and beneficiaries and inform all parties that their personal information may be shared internationally. The confirmation of status for each party is likely to be achieved most easily by the trustees requiring each party to complete a CRS and FATCA self-certification form which should be retained (and updated as necessary) by the trustees.
How does a trust register for AEOI?
Registration must be completed using HMRC’s AEOI portal. The trust’s government gateway account is used to register. If a trust does not have a government gateway account, this can be created when registering (an ‘organisation’ account should be created.
A Global Intermediary Identification Number (GIIN) is needed for reporting under FATCA. If the trust does not hold a GIIN, 000000.000000.LE.000 should be input into the GIIN field.
Registration is a one-off process and the trust will remain registered until such a time as it is deregistered.
Questions and answers
Update: Since writing this bulletin, we have raised some questions with HMRC around the requirements to register for AEOI. These questions and HMRC’s answers are available in a separate blog.
This bulletin is a guide to AEOI and is not definitive. Detailed guidance is available in HMRC’s International Exchange of Information Manual. If trustees are in any doubt about their obligations, they should seek professional advice. The information above is based on Trustee Support Services Limited’s understanding of the legislation as at 23 December 2025.
