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The UK’s Automatic Exchange of Information (AEOI) regime forms part of the international framework for sharing financial information between tax authorities. Although the AEOI framework was introduced several years ago, HMRC’s updated registration requirements mean that many UK trusts, companies and partnerships need to register by 31 December 2025, and many of these will likely be unfamiliar with this obligation.
Registration is required for trusts, companies or partnerships classified as Investment Entities, which is where:
- at least 50% of their gross income (over the shortest of the last three years or the time since it was established) is derived from investing in financial assets such as stocks and shares, including capital gains
- and those assets are professionally managed by a Financial Institution (such as a bank or investment manager) that has discretionary authority over the entity’s investments.
A key point clarified by HMRC is that these are two separate tests. Where the income threshold is met, the presence of any discretionary investment management is sufficient to trigger registration, even if only a small proportion of the assets or income is managed on a discretionary basis. Importantly, where an investment manager acts purely in an advisory capacity, and the trustee, directors, or partners retain ultimate decision-making authority, the professional management condition will not be met, and AEOI registration will not be required.
A trust with a corporate trustee (a Trustee – Documented Trust) is also required to register for AEOI even if it has no investment income.
Bare trusts are not excluded from the AEOI registration requirements, whereas UK registered pension schemes are exempt from AEOI registration and FATCA (Foreign Account Tax Compliance Act) requirements. Trusts, partnerships and companies will need to establish whether the requirements have been fulfilled, and where required, register via HMRC’s AEOI Portal.
Entities that register will need to ensure they fulfil their due diligence obligations, which include submission of AEOI returns by the 31st May annually if funds are sent to non- resident beneficiaries.
HMRC has acknowledged that the rules were not widely publicised and has confirmed that late registration penalties will not be applied automatically, but has not stated that penalties will not be issued. HMRC may waive penalties due to "reasonable cause", and, most notably, this is more likely to occur when contact with HMRC is made early. Failure to register could lead to the imposition of penalties as well as increased audit activity and scrutiny by HMRC, particularly with regard to non-resident account owners or beneficiaries.
Reference/Citation
(HMRC internal manual International Exchange of Information Manual) | (HMRC) –
https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim400000
(New registration requirement for some trusts and investment companies) | (TAXADVISOR)- https://www.taxadvisermagazine.com/article/new-registration-requirement-some-trusts-and-investment-companies
(Trusts must meet new registration requirement by 31 December) | (ICAEW) - https://www.icaew.com/insights/tax-news/2025/dec-2025/trusts-must-meet-new-registration-requirement-by-31-december
(Urgent 31 December 2025 registration deadline for some trusts and companies) | (ATT) - https://www.att.org.uk/technical/news/urgent-31-december-2025-registration-deadline-some-trusts-and-companies-updated
(Deadline of 31 December 2025 for trusts to register under AEOI regulations) | (CIOT) - https://www.tax.org.uk/deadline-of-31-december-2025-for-trusts-to-register-under-aeoi-regulations
