Changes to the Trust Registration Service
As many of our clients will be aware, HM Revenue & Customs (HMRC) has required all UK taxable trusts to be registered with their Trust Registration Service (TRS) since 2017; with the aim of improving transparency around the beneficial ownership of assets held in trusts with UK tax liabilities.
However, with the introduction of the Fifth Money Laundering Directive in October of last year, the requirement for trustees to comply with TRS has been extended. As part of the extension, many non-taxable trusts will also be required to register with TRS for the first time.
All trusts brought within the new regime were initially required to register by 10 March 2022, however following a delay in the roll-out of HMRC’s upgraded TRS register, this deadline has been extended. We’ve summarised the new deadline dates to assist trustees under the new scheme below.
The new registration deadlines
Non-taxable trusts
Any trust created before 6 October 2020 (unless it falls within the excluded categories below) is required to register with TRS by 1 September 2022.
Any trust created within 90 days before 1 September 2022, and any created after that date, must register with TRS within 90 days of creation.
Trustees must also update TRS for any changes to the information held within TRS within 90 days of becoming aware of any such change.
Taxable trusts set up prior to 6 April 2021:
Any taxable trust created before 6 April 2021, liable to UK income tax/capital gains tax for the first time, must register on TRS by 5 October after the end of the tax year of first liability.
For any trusts with other UK tax liabilities, the trustees must register with TRS by 31 January after the end of the tax year of the first liability (e.g. SDLT)
Taxable trusts set up on / after 6 April 2021
For any trusts created on/after 6 April 2021, and within 90 days before 1 September 2022, they must register with TRS by 1 September.
In all other cases, the trustees must register within 90 days of becoming liable to pay UK tax.
However, should an excluded trust require a Unique Taxpayer Reference (UTR), the trustees will still have to complete TRS, as this is the only way to obtain a UTR.
The new categories of ‘excluded trusts’
Some trusts will qualify as an ‘excluded trust’ and will therefore fall outside the TRS regime. The main trusts excluded from this extended regime are:
● Trusts established under statute – e.g. intestacy, bankruptcy
● Co-ownership trusts (legal and beneficial owners are the same persons), e.g. a couple jointly own a home and have a joint bank account
● Trusts set up before 6 October 2020, holding assets valued at less than £100
● Will trusts wound up within two years of death
● Trusts for life policies paying out on death, terminal illness or disability
● UK charitable trusts
● Maintenance Fund trusts (trusts approved by HMRC for the maintenance of specific historic buildings/land)
● Trusts for bank accounts for minors/vulnerable people, trusts holding insurance policies covering temporary disablement cover, and trust holding healthcare policies.
Next steps
Trustees have a legal duty to comply with HMRC reporting requirements, and should understand their responsibility under the TRS to register any trust falling within this reporting criteria.
You can register for TRS online using the following website: https://www.gov.uk/guidance/register-a-trust-as-a-trustee.
Alternatively, if you do not wish to undertake this registration process yourself, Duncan & Toplis may be able to conduct this on your behalf for an initial fee of £250+ VAT. However, additional fees may be levied if further work is required. If you do wish to appoint Duncan & Toplis to conduct this process, please email TRS@duntop.co.uk.
Please get in touch by email, phone or using our contact form if you have any questions.
