ATED: Bare Trust: NRLS


A client owned a property in London via off-shore company.

On the first glance it seems it falls under ATED but as per HMRC ATED technical guidance, Page 4 : example 2. Quoted below:

Example two: B Ltd is acting as a bare trustee for Mr Y and it holds the legal title to a dwelling worth £15 million. The beneficial interest in the dwelling is held by Mr Y personally. Despite B Ltd owning the legal title to the dwelling it does not own the beneficial interest. B Ltd does not therefore meet the ownership condition and is under no obligation to (and should not) send in returns

Client came under this scenario thus was not covered by ATED.


  1. a) ATED Technical guidance

2. It is well settled under English law that a trust does not need to be in writing and may be made orally. Source : Lily Tang Vs HMRC 2019 UKFTT 81 but in the case of land , the trust needs to be evidenced in writing under S53(1)(b) Law of Property Act 1925.


Same client planned to let this property out on rent. There was confusion as to which form to complete, we called HMRC and they advised that as the legal owner is the company we should complete form NRL2.

We made an application but HMRC sent us a letter back asking us to complete NRL 3 for trusts as there is a bare trust involved.

We conclude that HMRC second advice asking us to complete NRL3 is correct as a trust is involved bare or any other type.

Thank you HMRC for all the guidance.

HMRC is in our opinion is one of the best tax collecting institutions in the world.


Incentive for manufacturers in UK

UK government does not support its manufacturing and farming industries like other countries.

Current incentives are listed below:

  1. Super deduction

Companies that incur qualifying expenditures between 1 April 2021 to 31 March 2023, can claim:

  • a super-deduction allowance of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
  • a first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances

Thus, super-deduction of 130% will provide a deduction exceeding the cost of the asset and first year deduction of 50% will accelerate allowances.


  1. Used and second hand will not qualify.
  2. Expenditures on contracts entered into prior to 3 March 2021 even if expenditures are incurred after 1 April 2021. 
  3. Plant and machinery expenditure which is incurred under a Hire Purchase or similar contract must meet additional conditions to qualify


ACCA guidance

2. Research & Development

This is more difficult to qualify but has higher rewards. If a company incurs expenditure to make an advance in science or technology, it can claim R&D relief:

  • deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
  • claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss


3. Government support directory

UK Government has made a helpful directory where businesses can find funding in shape of grants, equity and debt. Access it via link

4. Local chamber of commerce

One can join local chamber of commerce to meet similar businesses and share ideas and contacts.

Remittance out of India

There are two main types of accounts in India. NRE and NRO both are maintained in INR.

PurposeFor sending monies to India from another countryFor funds generated in India like rental income
RepatriationFully repatriable i.e. all funds in this account can be sent out of India without any restrictions.Repatriation limit of USD one million per financial year.   Plus, paperwork needs to be completed before sending funds out of India.1
  • 1. Paperwork required:
    • Form A2  – Funds transfer form
    • Form 15CB – Chartered Accountant certificate
    • Form 15 CA – Self declaration

A useful blog I found on this subject.

August 2021

Recently a client wished to invest funds in the Indian stock market and he contacted his old bank where he had a dormant account, after lot of paperwork and telephone calls finally the bank was able to activated NRO accounts and client started sending funds to India in his NRO account.

We realised that this is not the optimum solution for the client as he is sending his overseas earnings to India and will face restrictions in the future if funds are sent via NRO account, see above for restrictions.

We have requested the banker to change the arrangement to NRE account, let see how things turn up.

November 2021

NRE PIS account opened after months of to and fro.

December 2021

Client wanted to transfer shares held in NRO account to NRE account but due to lack of clear rules, this project was abandoned.