Question to the HM Treasury:

To ask Her Majesty's Government what plans they have to tackle the use of trust funds (1) to avoid tax, and (2) to claim benefits which would not otherwise be available.

HMRC undertake tax compliance activity on trusts in the same way as they do other compliance activity and come down hard where tax avoidance or evasion is discovered. Since 2010 over £160 billion in additional tax revenue has been secured and protected as a result of actions to tackle tax evasion, avoidance and non-compliance.

In 2017, HMRC established a register of trusts incurring UK tax consequences, enabling law enforcement authorities to identify beneficial owners of relevant trusts and at the Autumn Budget 2017 the Government announced it will publish a consultation in 2018 on making the taxation of trusts simpler, fairer, and more transparent.

Benefit claimants are required to inform the DWP of the income and capital that they possess, or have access to, in order to properly determine their benefit entitlement and the correct amount of payment.

The benefit regulations contain provisions that ensure that the claimant is treated as possessing any income or capital which they have deprived themselves in order to get the benefit or a higher payment, whether or not it has been placed in a trust.

Final estimates for 2016-17 indicate that 2.0% of benefit expenditure was overpaid due to fraud and error. The Government remains committed to tackling both over and underpayments of benefit. This includes protecting the public purse from those seeking more than their entitlement. The Government will continue to explore the role data matching can play as part of this approach.