13 October 2021

What is HMRC’s Trust Registration Service?

by Charlotte Crawford

The Trust Registration Service (‘TRS’) was developed in 2017 as a result of anti money laundering regulations. It requires trustees to provide information about the trust, including its assets, all relevant parties and beneficiary details. Changes to the anti money laundering regulations mean that many more trusts will be required to register than before.

Do I need to register?

If you are a trustee, you will need to consider carefully if you are required to register the trust. The recent changes – which came into effect from 6 October 2020 – mean that all express trusts, even if they are not taxable will need to be registered unless they are excluded. All taxable trusts should be registered.

Which trusts do not need to be registered?

• The trust is used to hold money or assets of a UK registered pension scheme — such as an occupational pension scheme.
• The trust is used to hold life or retirement policies providing that the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured.
• The trust is holding insurance policy benefits received after the death of the person assured — as long as the benefits are paid out from the trust within 2 years of the death.
• It is a charitable trust that is registered as a charity in the UK or which is not required to register as a charity.
• It is a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100 — pilot trusts set up after 6 October 2020 will need to register.
• It is a co-ownership trust set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’.
• It is a will trust created by a person’s will and comes into effect on their death providing they only hold the estate assets for up to 2 years after the person’s death.
• It is a trust for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent.
• Trusts set up for personal injury compensation or under the Criminal Injuries Compensation Scheme.
• it is a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets.

What if I registered with HMRC years ago?

Unfortunately even trusts which were registered with HMRC by submitting a Form 41g and received a UTR still have to be registered with TRS. This is because much more information is required on TRS than was included on form 41g to comply with the anti money laundering regulations.

What information will I need to register?

You will be required to provide the following information:

1. Details about the trust – the name of the trust, whether or not it is an express trust and details about land purchased.
2. Trustees – you will need to designate a lead trustee and provide their name, telephone number, date of birth, national insurance number (if available), nationality, passport details (if not a UK citizen) and country of residence. National insurance number, passport details are not required for non-lead trustees.
3. Settlor – you will need to provide the name, date of birth, date of death (if the trust was created upon death), nationality and country of residence (or last residence).
4. Beneficiaries – include details of named beneficiaries and classes of beneficiary.
5. Details of assets held.
6. Details about any protectors or others associated with the trust.

What are the deadlines?

The deadlines depend on whether or not the trust is taxable and the date the trust was commenced.

Non Taxable Trusts created before or on 6 October 2020 – 1 September 2022.

Non Taxable Trusts created after 6 October 2020 – within 90 days of creation or becoming registrable or 1 September 2022 (whichever is later).

Taxable trusts created on or after6 April 2021 – within 90 days of becoming taxable or 1 September 2022 (whichever is later).

Taxable trusts created before 6 April 2021:

Where they are liable for income tax or capital gains tax for the first time – by 5 October in the tax year after the trust receives income or has any capital gains and becomes liable for tax.

Where they have been liable for income tax or capital gains tax before –  by 31 January in the tax year after the trust receives income or has any capital gains and becomes liable for tax.

Where they are liable for other taxes such as inheritance tax – by 31 January in the year after the tax liability has arisen.

Where more than one tax is due, the earlier deadline applies.

What happens if I don’t register on time?

HMRC may issue payment penalties if the trust is not registered on time.

How do I register?

You can register using the government website or you can seek assistance from professionals. Here at Hugh Jones Solicitors our friendly team are ready to assist you for a fixed fee. If you’d like more information please contact us on 0161 871 3680 

Charlotte Crawford, Head of our Private Client team - contact Charlotte by email or telephone - 0161 871 3680