The requirement for certain trusts with a UK tax liability to register on the Trust Registration Service (TRS) was originally introduced in June 2017. However, the extension of the TRS now means that, subject to limited exceptions, all existing UK trusts and some non-UK trusts, will also be required to register with HMRC by 1st September 2022.
We have, of course, already written to our existing clients who will be impacted by this. However, we thought this summary might prove useful to those of you who haven’t yet completed the registration process, or those of you who might have family, friends or colleagues that aren’t aware of the changes and who may need to take action.
The UK Government introduced the Trust Register to provide greater transparency around the ownership of trust assets and individuals connected with trusts. As part of the registration, trustees provide certain details relating to the trust, including the identity of the trustees, beneficiaries and trust assets. Trustees are also required to keep the information up to date or confirm annually there have been no changes.
Since 2017, most UK and non-UK tax resident trusts with a UK tax liability have been required to register with the TRS. The scope of the TRS was extended in October 2020 to include the following trusts:
- All UK resident “express” trusts, unless specifically excluded. These are trusts which are created deliberately by a settlor.
- Non-UK resident express trusts which acquire land or property in the UK, or have at least one UK resident trustee and enter into a business relationship with an “obliged entity”, possibly a financial institution, an accountant, tax adviser, estate agent etc
- Non-express trusts and certain excluded express trusts which have a UK tax liability
Certain trusts are excluded and not required to register, unless they are liable to pay UK tax, including, but not limited to:
- Trusts required to open a bank account for a child
- Trusts for bereaved minors or adults aged 18-25
- Will trusts (but only for the first two years after date of death)
- Charitable trusts
Deadlines for registering taxable trusts will depend on when the trust was established and when the first tax liability arises. We recommend you seek advice from an accountant.
Non-taxable trusts in existence on or before 6th October 2020 must register on or before 1st September 2022. Where created after 6th October 2020, they must register within 90 days of being created, or by 1st September 2022, whichever is the later.
The Trust Register must also be updated within 90 days of any changes to the trust details or beneficial ownership. Where the trust is taxable, the trustees must declare on their annual Self-Assessment tax return that the Trust Register is up to date.
Given the significant changes and extension in the scope of the TRS, it is extremely important that trustees review their position to assess their registration obligations to avoid penalties. Although we’re not able to complete applications, we would be happy to assist or point you in the direction of other professionals who will be able to advise. But, please don’t leave this too long, as the 1st September deadline isn’t far away!
Feel free to make use of this step by step guide to assist you with the registration – Please click on the link below!