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HMRC is consulting on proposals that would, for the first time, require individuals and trusts to notify HMRC when they adopt an uncertain tax treatment (“UTT”) that confers a tax advantage.

Individuals and trusts brought fully within scope

All individuals and all trusts will fall within the UTT regime, without any turnover, balance sheet or “wealth” threshold albeit a notification would only be required where the tax advantage exceeds £5 million.

The current proposals will extend the UTT regime beyond income tax to also include:

• Capital Gains Tax
• Inheritance Tax
• Stamp Duty Land Tax (England and Northern Ireland only)
• All classes of National Insurance contributions
• Construction Industry Scheme deductions (where relevant)

This increases the likelihood that complex transactions such as asset restructurings, trust appointments, property transactions or succession planning could fall within scope.

Current rules

Since April 2022, the UTT regime has required certain large companies and partnerships to notify HMRC when they have adopted a UTT in relation to Corporation Tax, VAT or Income Tax (including PAYE).

Under the current UTT regime, an uncertain treatment is defined by two triggers and notification is required where: (i) one or both of the statutory triggers are met, (ii) the tax advantage exceeds £5 million and (iii) no exemption applies.

The existing statutory triggers are:

• the taxpayer’s interpretation of the law is contrary to HMRC’s known position, as set out in published guidance or in correspondence with HMRC; or
• the taxpayer has recognised a provision in its accounts to reflect the likelihood that a different tax treatment will ultimately apply.

New “unknown HMRC view” trigger

In addition to the existing triggers, HMRC proposes a new notification trigger  where:

• there is more than one credible legal interpretation, and
• HMRC has not published or otherwise communicated its view.

This is particularly relevant for individuals and trusts, where planning often relies on areas of law that are technically uncertain but not directly addressed in HMRC guidance. Where a trust holds assets through a company or partnership, the notification obligation would arise only if the trust itself adopts an uncertain legal interpretation. This may be difficult to apply in practice, particularly for employee benefit trusts and other sponsored arrangements.

Tighter exemption

Currently, no notification is required if it is reasonable to conclude that HMRC already has all relevant information. HMRC proposes to tighten this exemption so that individuals and trustees would need explicit confirmation from HMRC that it is aware of the uncertainty.

This change would significantly reduce reliance on informal disclosures made through correspondence, returns or enquiries, and may encourage earlier and more formal engagement with HMRC. It may be wise to engage proactively with HMRC where uncertainty arises, with a view to obtaining the confirmation needed.

Next Steps

Although the £5 million threshold limits the scope, the proposals would require individuals and trustees to:

• identify and document legal uncertainty more formally;
• assess competing interpretations against HMRC guidance (or the absence of it); and
• track potential tax advantages across multiple taxes.

HMRC acknowledges that this will increase compliance obligations, even where HMRC ultimately agrees with the taxpayer’s position.

The present consultation closes on 4 June 2026, with HMRC’s response expected later in the summer. Those likely to be affected may wish to consider responding to the consultation, particularly on the practical and administrative challenges. Any legislation would be introduced in the next Finance Bill and would apply to returns filed from 1 April in the following tax year.

¹ Linked to the Sept 2025 Guideline for Compliance GfC13

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