Changes to the Trust Registration Service

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 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.

We advise that trustees should seek specific tax advice based on their trust’s circumstances in a timely manner - as the deadline is fast approaching for registration. Failure to register a trust or a failure to notify any change of information by the due date can result in penalties.

Get in touch with our team for help and more information.