Trust Registration Service update
The Trust Registration Service (TRS) came into effect in the UK in 2017. Trustees were required to register all trusts with UK tax liabilities.
Following implementation of the Fifth Money Laundering Directive regulations, trustees will now be required to register all UK trusts (whether taxable or not) unless there is a specific exemption.
Non taxable trusts in existence before 4th June 2022 must be registered by 1st September 2022. Non taxable trusts set up on or after 4th June 2022 must register within 90 days of the trust becoming registerable (previously the window was just 30 days).
Trustees will also be required to update the register with any changes in trust information within 90 days of becoming aware of any changes to the information held on the TRS. Such changes may include the retirement or appointment of trustees. When the annual trust tax return is filed, trustees must declare that the information held on the TRS is up to date.
All trusts that are liable for UK tax must still register. Examples of non taxable trusts which are excluded and fall outside the TRS regime include:
- Trusts imposed by statute such as on intestacy or bankruptcy.
- Co-ownership trusts where the legal and beneficial owners are the same persons. An example is where a couple jointly own their home or have a joint bank account.
- Trusts set up before 6th October 2020 holding assets valued at less than £100.
- Will trusts which are wound up within two years of the date of death.
- Trusts of life policies which pay out on death, terminal illness or disability.
- UK charitable trusts.
It is likely that a large number of non taxable trusts will need to be registered. These include trusts set up under a Will where one or more beneficiaries have a right to occupy a property.
Trustees have a legal duty to comply with HMRC reporting requirements. Trustees must therefore register any trust which falls within the reporting criteria. If required to register, it is important the trustees give themselves sufficient time to collate all the information that will be required.
Law firms, accountants and other tax advisers will be required to check that a trust is registered on the TRS before working on it so trustees who have not registered their trust will not be able to obtain professional advice if they need it.
If you require further information about the Trust Registration Service or help with registering a trust, please contact Anna Suchocki or Peter Gooch.
Peter Gooch is the Probate and Trust Manager at Barker Gotelee, Solicitors in Suffolk.