Trustees have been under a duty to register trusts with HMRC where there is a tax liability since 2017 using HMRC’s Trust Registration System (“TRS”). However, the TRS has been extended as a result of the Fifth Anti-Money Laundering Directive (which came into force on 6 October 2020) so that many more trusts must now be registered with HMRC despite there being no tax liability. All trusts that are caught under the regulations must be registered with HMRC by 1 September 2022.
The HMRC Trust Registration Manual provides full details of the types of trusts that are caught and must register and also those trusts which are specifically excluded from registration. Some co-ownership of property arrangements are also caught by the new rules where the names on the legal title to the property are not identical to the individuals that are entitled to benefit. Here is a link to the manual https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual
It is worth noting that trusts that were in existence on 6 October 2020 but come to an end before 1 September 2022 will still need to be registered and then immediately reported as “closed”.
Any new registerable trusts created after 4 June 2022 must be registered within 90 days of their creation. Once registered, any changes to the trust details or circumstances (for example a change of trustee) must be reported to HMRC within 90 days of the change. Any taxable trusts must be registered by 31 January (or in some cases 5 October) following the end of the tax year in which the trust acquires a liability to a relevant UK tax.
HMRC’s Trust Registration Service is open to begin the process of registering trusts caught by the new regulations and we suggest that the process is completed as soon as possible to prevent the application of sanctions and penalties for non-compliance.
If you wish, Pickerings are able to assist you in determining whether your trust is registerable and with all of the necessary work required to complete the trust registration process.
However if you would like to deal with the registration yourself, please look at Register a trust as a trustee - GOV.UK (www.gov.uk) for more guidance.
If you would like our assistance with the registration, please contact Sophia Farmer on 01827 317090 or by email email@example.com.
The contents of this article are intended for general information purposes only and shall not be deemed to be or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.