Discretionary Trust/savings account in US- do I need to file in the UK?

Hi guys,

apologies if this has been asked, but for some reason after three years in the UK, it just popped into my head that I might need to file a self assessment form in the UK. So I am the beneficiary of a discretionary trust that my dad left me when he passed away, based in California. The only time I get money is for Christmas and my birthday- so twice a year, and it amounts to a couple thousand dollars on each occasion. I think the situation is my mother gives the money from her personal account and gets reimbursed from the trust, to avoid taxing me, but im not 100% clear on that.

The money gets deposited in my old checking account in the US which I then put into my savings account. It's a standard savings account so it doesnt earn that much interest to be fair- maybe less than $10 all year.

Do I need to file a self assessment form in the UK? I havent done so for the past three years and of course am subject to PAYE taxes in my regular job- will the HMRC/Home Office see my accounts when I apply for ILR, and will I be penalized a great deal if I file now?

If the payment goes to your mother and she declares it on her tax return then it sounds like it is after-tax money she gives to you so it would count as a gift and so no need for it to be declared to HMRC.  You will need to check this of course with your mother.

It sounds like you are a USC so I assume that you also file a US tax return each year?

If you are a UK resident and in the class of beneficiaries of a California based trust, the trustees will want to take legal advice on their obligations (if any) and on the tax implications for you should they choose to make distributions of income or capital payments to you. I'd ask the trustees to share a copy of this advice with you.