The Trust Registration Service (TRS) is a register of the beneficial ownership of trusts. It was introduced by the UK Government to provide more transparency on the ownership of trust assets and those individuals connected with trusts. The original requirement to register was introduced in June 2017 and only covered trusts that were liable to UK tax. Now as part of the UK’s implementation of the Fifth Money Laundering Directive, the scope of TRS has been widened and from October 2020 the register is now open for non-taxable trust registrations. This means that all “trust” arrangements should be reviewed, as HMRC will issue penalties for non compliance.
It is the trustees’ responsibility to identify whether a trust needs to be registered on the TRS. The trustees will need to provide the required information in relation to the trust together with information on the persons involved in the trust which include the settlor, trustees, and beneficiaries.
These details include names, dates of birth, date of death if trust created by will, contact details and national insurance number of lead trustee, nationality, and country of residence. For trusts which have a UK tax liability, the trustees must provide further information on the assets held by the trust and additional information on all the settlors, trustees, and beneficiaries.
Now that the trust register has been expanded so widely we have highlighted those trusts that are specifically excluded. Although the list may appear to cover a significant number of situations, some of the trusts listed are only set up in limited circumstances. It is recommended that the position is checked, if it is not clear that a trust is on the list of exclusions which include:
- Trusts imposed by courts or created by legislation, such as a trust created by intestacy;
- A trust created by a person’s will which comes into effect on their death as long as wound up within two years of the person’s death;
- 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 and where the trustees and the beneficiaries are the same person;
- A trust holding life or retirement policies which only pay out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured;
- A trust holding insurance policy benefits received after the death of the person assured where the benefits are paid out from the trust within 2 years of the death;
- A ‘pilot’ trust set up before 6 October 2020 holding no more than £100. Pilot trusts set up after 6 October 2020, or if funds are added to these trusts to take the value over £100 will need to register;
- Disabled trusts which meet certain criteria;
- Charitable Trusts that are registered as a charity in any part of the UK;
- A trust for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme;
- A trust created as a result of a fatal accident or personal injury claim;
- Trusts imposed under a Court Order, including Court of Protection Orders and Divorce;
- A ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets;
- A trust that is required to open a bank account for a minor child;
- UK registered pension trusts;
The following are the deadlines for trust registration:
- non-taxable trusts in existence on or after 6 October 2020 by the 1 September 2022.
- non-taxable trusts created after 1 September 2022 within 90 days.
- changes to the trust details and/or circumstances, within 90 days of the change.
It is also important to note that there is an annual requirement to submit a declaration to confirm the information held by HMRC is accurate and up to date.
If you are concerned that you may have an arrangement in place that does not meet the above criteria for exemption, or you are concerned that any planning you have undertaken may need to be notified to HMRC under TRS then please contact Jacqui Birks (email@example.com) or James Taylor (firstname.lastname@example.org).