AEOI compliance: new HMRC registration rules

 If you are a trustee or owner of certain investment structures, you now need to be aware of a significant change to AEOI compliance (Automatic Exchange of Information compliance). In many instances, you will need to act by 31st December 2025 to avoid penalties.

People likely to be affected will already be familiar with the Trust Registration Service (TRS). However, the recent International Tax Compliance (Amendment) Regulations 2025 introduced a new and separate requirement (the regulations came into force on 16 July 2025). Certain entities now have to register for HMRC’s Automatic Exchange of Information (AEOI) service as part of their AEOI compliance obligations under the Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA).

It’s very important to note that this registration is separate from TRS. Even if your TRS position is up to date, you may still have a legal duty to register for AEOI compliance. If you miss the relevant deadline, it can lead to penalties.

What is AEOI compliance?

AEOI compliance means that you adhere to Automatic Exchange of Information rules. These are designed to support international tax transparency and allow tax authorities to share information to reduce offshore tax evasion.

In the UK, AEOI compliance is primarily managed through:

• the Common Reporting Standard (CRS)
• the US Foreign Account Tax Compliance Act (FATCA)

In the past, many UK trusts and investment vehicles did not need to engage with HMRC’s AEOI service. This was because they had no reportable accounts or no reportable persons (non-UK residents). The amendments that came into force in 2025 changed this by creating a clear registration duty for certain entity types, even where there is ultimately nothing to report.

Why TRS registration is not enough

A common misconception is that TRS registration covers all trust-related formalities. It does not. AEOI compliance registration sits in a different part of HMRC’s systems and serves a different purpose.

• TRS focuses on anti-money laundering (AML) and identifying beneficial ownership.
• AEOI compliance focuses on international tax transparency and financial account reporting under CRS and or FATCA.

In practice, some structures will need to do both.

AEOI compliance deadlines for HMRC registration

For many existing entities that fall within these rules, the deadline for registering is 31st December 2025.

For entities that become in-scope later, the deadline is the later of:

• 31st December 2025, or
• 31st January following the end of the calendar year in which the entity first becomes a Reporting Financial Institution (RFI) or a Trustee-Documented Trust (TDT)

If you are unsure when your entity became subject to AEOI compliance, it is worth checking promptly.

Who needs to register for HMRC’s AEOI service?

The registration requirement is aimed at two main categories:

1. Reporting Financial Institutions (RFIs) for CRS and or FATCA
2. Trustee-Documented Trusts (TDTs)

If your structure falls into either category, you should assume AEOI compliance registration is needed (unless you have professional advice that confirms otherwise).

Reporting Financial Institutions: the AEOI compliance tests

A trust or company is often treated as an ‘Investment Entity’ (and therefore an RFI) if it meets two conditions.

1) The income test

Typically, where 50 per cent or more of gross income is attributable to investing, reinvesting or trading in financial assets, often assessed over the shorter of a three-year lookback period or the period the entity has existed

2) The managed by test

The entity is managed by another Financial Institution. For example an investment manager or discretionary fund manager might be managing some or all of the entity’s financial assets. The ‘managed by’ condition is typically met where one or more trustees is a Financial Institution, or where the trustees have appointed a discretionary fund manager. Whether the trust is an Investment Entity (and therefore an RFI) will still depend on the financial assets and gross income tests, so a corporate trustee does not automatically mean the trust is in scope.

Trustee-Documented Trusts and AEOI

A Trustee-Documented Trust is not simply any trust with professional involvement. In practical terms, it is a trust that would otherwise be an Investment Entity, but where a trustee that is itself a Financial Institution agrees to fulfil the reporting obligations on the trust’s behalf using the Trustee-Documented Trust approach.

Under the new rules, Trustee-Documented Trusts may still need to register for HMRC’s AEOI service as part of AEOI compliance, even where the trustee is doing the reporting. When registering a Trustee-Documented Trust, the trust should be shown as the Reporting Financial Institution, with the reporting trustee named as the contact.

Investment companies and partnerships

AEOI compliance is not limited to trusts. Companies and partnerships, including Family Investment Companies (FICs), can also be caught if they meet the same broad “income” and “managed by” tests.

If your company holds an investment portfolio and uses an investment manager, it would be wise to review whether it is classified as a Reporting Financial Institution and, as a result, whether AEOI compliance registration is required. To register, you must use a Government Gateway sign-in set up as an organisation (not an individual). During registration you provide details for each Reporting Financial Institution or Trustee-Documented Trust you are registering.

Penalties for non-compliance with AEOI compliance registration

HMRC has the power to charge penalties for failing to meet AEOI compliance obligations, including the registration requirement. To summarise, you could be subject to:

• An initial penalty of up to £1,000 for not registering when required
• Daily penalties of up to £300 if the failure to register continues after a notice is issued

HMRC has said that penalties won’t be issued automatically, and that reasonable excuse provisions apply. Having said that, the legal obligation remains, so late registration should be rectified as soon as possible.

How THP can help you with AEOI compliance

Determining whether an entity is an RFI or a TDT is technical and fact-specific. It often depends on:

• the entity’s sources of income, and how the 50 per cent gross income test applies
• the terms of the investment management agreements
• whether a trustee is a Financial Institution and whether the Trustee-Documented Trust approach is being applied correctly

If you are unsure of your AEOI compliance status, we can help. We can review your structure, confirm the likely classification for CRS and or FATCA, and support you through HMRC’s AEOI registration process so that you remain compliant. Get in touch today to learn more.