Registration of Trusts: Does it Affect Me?
Are you the trustee or beneficiary of a trust? If so you need to be aware that a HMRC has set a deadline by which certain trusts must be registered.
The Trust Registration Service
The Trust Registration Service (TRS) came in to effect in June 2017 and is a register of the beneficial ownership of trusts. It was set up as part of an EU anti-money laundering directive and required any trust where there was a tax liability in the United Kingdom to be registered.
Following the introduction of legislation in October 2020, from 1st September 2022 certain trusts are required to be registered on the TRS regardless as to whether there is a tax liability.
Express Trusts
The TRS does not affect all trusts and is limited to those known as ‘express trusts’. These are trusts which have been set up by a settlor (the person depositing funds) as opposed to, for example, charitable or a disabled person’s trusts. The full list of exclusions can be found on GOV.uk
It is therefore important as a Trustee or beneficiary of a trust, whether created prior to 1st September 2022 or not, to check with your professional advisors as to your obligations as regards registration.
Registration requirements
Registration can be completed through the Government Gateway and is ordinarily completed by the Trustee or their professional advisors. The Trustees will have to provide comprehensive details regarding the trust including the assets within it as well as information and identification of themselves, any settlor and details of all beneficiaries.
Registration Deadlines
- Non-taxable trusts created on or before 6th October 2020 must be registered on or before 1st September 2022, even if the trust has been wound up.
- Non-taxable trusts created after 6th October 2020 must be registered on the later of either 90 days after creation or 1st September 2022.
- Taxable trusts created from 6th April 2021 must be registered within 90 days of the trust becoming liable for tax or 1st September 2022, whichever is later.
There are also deadlines for registration of new trusts going forward which your legal advisor will inform you of.
Failure to register a trust under the TRS within the appropriate deadline will possibly result in the lead Trustee receiving fines. Fines can be levied on the failure to register the trust or, where appropriate, failure to update HMRC of any changes to the trust. It is possible that HMRC may be lenient whilst the implementation of the new rules take effect however it is strongly advised that professional advice is sought either of the Solicitor or Accountant acting to ensure that all obligations are complied with and taxes where appropriate are paid.
Review your Trust
This may also be a good opportunity for the trust to be reviewed to ascertain whether there are options available to the Trustees concerning any impending 10 yearly anniversary charge or the treatment of trust income and exploring all possibilities which may save the trust or its beneficiaries future tax liability.
Should you have any questions or concerns regarding this matter then please contact Head of Private Client Team Tim Bailey on 01606 334309 e-mail tbailey@butcher-barlow.co.uk
Tim Bailey