What is the Trust Registration Service
- The Trust Registration Service (TRS) is a register held by HMRC noting the beneficial ownership of trusts. It was set up in 2017 under an EU anti-money laundering directive and under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, all UK ‘relevant trusts’ are now required to register on the TRS.
Trustee responsibilities
- All ‘relevant trusts’ (except for a few exempt trusts) created on or after the 6th October 2020 must be registered by 1st September 2022. This is regardless of whether the trust is tax paying or not. The requirement to register also includes trusts that have been disbanded prior to 1st September 2022, but that were in existence on or after the 6th October 2020.
- Trustees have a legal obligation to register ‘relevant trusts’. If you do not register your trust or keep the details on the register up-to-date HMRC may enforce penalties.
- Trustees must keep up-to-date records of the parties to the trust, including; the Settlor (being the person who created the trust), the beneficiaries and the trustees.
- Trustees are responsible for registering and maintaining a trust on the TRS and this is done by the person chosen to be the Lead Trustee.
- The Lead Trustee must update the register after any significant changes or events, including (but not limited to) confirming if the trust is taxable/non-taxable or if there has been a change or retirement of trustees.
- Offshore trusts must be registered if they have at least one UK resident trustee.
- Non-UK registered trusts that acquire land or property in the UK must also be registered, however, trusts already registered in another EU Member State are automatically exempt.
Relevant trusts
A ‘relevant trust’ is:
- All UK express trusts, and some non-UK express trusts; and
- UK and non-UK trusts with a liability to UK taxation
What is an express trust?
An express trust is a trust created deliberately by a Settlor, usually via a written deed or declaration of trust. Express trusts can be created:
- to take effect during the settlor’s lifetime, or
- by will, to take effect upon death
Regardless of whether a trust is express or non-express, all trusts must use the TRS to register with HMRC if the trust has a UK tax liability arising from UK income and/or UK assets. The trustees must then keep the information held on TRS up-to-date.
Deadlines
- Non-taxable trusts in existence on or after 6th October 2020 must register within 90 days of becoming registerable, or on or before 1st September 2022 (whichever is later). This includes trusts that were in existence on or after 6th October 2020 but have since been disbanded.
- Any changes to a trust must be updated on the register within 90 days of the change.
- Estates where the administration has continued for more than two years, and ‘Complex Estates’, need to be registered. Personal Representatives have a deadline of 5th October after the tax year when the estate starts to receive income or incurs chargeable gains on which tax is payable. ‘Complex Estates’ are deceased estates with a total income and CGT liability exceeding £10,000, or with a Gross Probate value exceeding £2.5 million, or where the value of assets sold by Personal Representatives during one tax year exceeds £500,000.
- Taxable relevant trusts set up before 6th April 2021 must be registered on or before 31st January after the tax year in which the tax liability occurred or by 5th October after the end of the tax year for a first-time liability to Income Tax or Capital Gains Tax.
- Taxable relevant trusts set up after 5th April 2021 must be registered by the 1st September 2022.
- Both taxable and non-taxable relevant trusts set up after 4th June 2022 must be registered within 90 days of creation.
Exempt trusts
Trusts excluded from the requirement to register, include:
- Will trusts that are wound up within two years of death
- charitable trusts
- policy trusts paying out on death or critical illness
The full list of exempt trusts is found here, on the Government website.
Registering the trust
To register the trust go to the Government website for trust registration.
A full copy of the TRS manual is available here.
Third Party Access to TRS information
- The information contained within the TRS can be accessed to by third parties but only those with a ‘legitimate interest’
- Someone with a ‘legitimate interest’ is a law enforcement agency investigating money laundering and financing of terrorist activities
- HMRC can refuse access where there is a disproportionate risk of exposing the beneficial owner for example to fraud, blackmail, or intimidation
The information contained in this blog is accurate as at 16th August 2022.
Article written by Eleanor Mills.
