HMRC have launched a new Trust Registration Service (‘TRS’) which is essentially a register of the beneficial ownership of trusts, whereby it is now mandatory for all non-tax paying trusts to be registered online.
Previously, only trusts subject to a UK tax liability were required to be registered. However, the introduction of new rules means that many more trusts must now also be registered. HMRC requires any previously unregistered trusts to be registered, using the TRS, by 1st September 2022. Failure to do so will result in a fine.
The trust must be registered if it becomes, or is liable for:-
- capital gains tax
- income tax
- inheritance tax
- stamp duty land tax or
- stamp duty reserve tax
The following types of trusts must register, even if there is no tax liability:-
- All UK express trusts, (unless exempt) which includes discretionary trusts and declarations of trust
- Non-UK express trusts (for example, trusts that acquire land or property in the UK)
- Trusts created to hold savings products (such as insurance bonds)
Other common types of trust that are caught by the regulations and need to be registered are:-
- A trust created by a Will where the trust still exists after the second anniversary of death. This includes, bare trusts, life interest trusts as well as discretionary trusts
- A discretionary trust that is created during that person’s lifetime
- A Will trust that, although is less than two years old, has had property added to it from outside of the estate
- A bare trust of property
Should the trust be subject to tax, the Trust Register will have to be updated annually or, by a declaration stating that there are no changes. If, however, the trust is not taxable then this declaration is not needed, with the exception being for purely administrative changes.
The rules require that all previously registered trusts are ‘claimed’ by the lead trustee (or the executor) so that an annual and up to date confirmation can be filed. The lead trustee will need to create a Government Gateway account and successfully pass security questions based on the trust details in order to do so.
With regards to taxpaying trusts, tax returns now ask for confirmation as to whether the Trust Register is up to date.
Trusts excluded from registration
Further information regarding which types of trusts that do not need to be registered, unless liable for UK tax, can be found here:- www.gov.uk/guidance/register-a-trust-as-a-trustee
Should you be a trustee of a trust that falls into any of the categories above, and have any questions regarding the registration of a trust, please call our office on 0207 431 1912 or email one of the Private Client team:
Karen O’Brien – email@example.com
Lucy Townsend – firstname.lastname@example.org
Adam Kaye – email@example.com