The Trust Registration Service (TRS) & it’s deadline 1 September 2022.

Posted: 29 August 2022

What is it?

The UK Trust Registration Service (‘TRS’) is a register of the beneficial ownership of trusts.

The service, first introduced in 2017, is aimed at tackling money laundering, serious crime and terrorist financing.  The 2017 TRS only required trusts to be registered where there was a UK Tax liability.

However, new rules came into force in October 2020 (at the height of the COVID-19 pandemic) which now require all UK trusts (apart from a few exceptions) and some non-UK trusts in existence on or after 6 October 2020 to register with HM Revenue and Customs by 1 September 2022. If the deadline is not met, then HMRC may charge penalties to the trustees.

What Trusts does this apply to?

• Express Trusts – unless included on the exclusion list provided by HMRC (see below)
• Bare Trusts – Assets held on behalf of another individual
• Deeds of Variation or Variation of the terms of an intestacy
• Land/property where legal owners and beneficial owners are not the same – including Declarations of Trust where a married couple completed a declaration of trust to split the ownership and income between them, or when parents who have contributed a deposit towards a property purchase for a child which they gain back upon any sale.
• Will Trusts and Estate Administrations which have taken longer than 2 years to finalise
• If a Trust has not previously been registered but is now finished, but was in existence as of the 6 October 2020

In addition, if a trust is or should become liable for Capital Gains tax, Income tax, Inheritance tax, Stamp Duty Land tax or Stamp Duty Reserve Tax then it must be registered within 90 days of its creation or by the 1^{st of} September (whichever is later).

If a trust has a tax liability which is covered by a relief, then the trust will still need to be registered before the relief can be claimed via the self-assessment service.

What Trusts are excluded from the TRS?

Trusts excluded from the requirement to register, include: –

• Pension schemes
• Charitable trusts
• Will trusts (providing they only hold the estate assets for up to 2 years after the date of death)
• Policy trusts on holds of life or retirement if the policy only pays out on death, terminal/critical illness (provided they are paid within 2 years of the date of death)
• A trust for bereaved children under 18, or adults ages 18-25 set up under a Will (or Intestacy) of a deceased parent
• Co-ownership Trust set up to hold share of property (tenants in common)
• Existing lifetime trusts, with a value of less than £100, created before 6 October 2020
• Financial/Commercial Trust created in the course of professional services or business transaction for holding client money or other assets

What information is required to register the Trust?

Trustees must enter details about: –

• the lead-trustee
• the co-trustees
• the settlor
• the beneficiaries

What are the Trustees responsibilities?

It is the legal responsibility of the trustees to register the Trust. A lead trustee must be appointed, alternatively, trustees can appoint an agent to register the Trust.

Trustees are required to keep up to date written records of beneficial owner(s), settlors, trustees, and beneficiaries, if not, HMRC may impose penalties and fines for non-compliance with the registration requirements.

Why do I need to Register a Trust?

First and foremost, it is the trustee’s legal obligation to register the trust. If you do not register your trust or keep the details on the register up to date, HM Revenue and Customs can enforce penalties.

Also, you will be required to demonstrate to any third party that the trust has registered and is up to date on the TRS before they will be able to act for you. This can be obtained in the form of a certificate from the TRS portal.

When do I need to register the Trust?

• Non-taxable trusts in existence on 6 October 2020- even when the trust has since been closed – 1 September 2022
• Non-taxable trusts created after 6 October 2020 – Register within 90 days of being created or 1 September 2022 (whichever is later)
• Taxable trusts created on or after 1 April 2021 – Register within 90 days of the trust becoming liable to pay tax or by 1 September 2022 (whichever is later)
• Taxable trusts that were created before 6 April 2021 to pay Income Tax or Capital Gains Tax for the first time – Register on or before 5 October in the tax year after the one in which the trust starts to receive any income or has capital gains, and becomes liable for Income Tax or Capital Gains Tax.
• Trusts that have been liable for Income Tax or Capital Gains Tax before – Register your trust on or before 31 January in the tax year after the one in which the trust receives any income or has capital gains, and is liable for tax.

If your trust is liable for more than one tax and both deadlines could apply, you must register it before the earlier of the 2 deadlines.

How do I Register a trust.

The lead trustee or their appointed agent can register the trust via this link https://www.gov.uk/guidance/register-a-trust-as-a-trustee . If you are unsure on how to do this, please contact your Solicitor or an Accountant who will assist you on the registration process.

If you have any concerns about whether this may affect you, please contact a member of our Private Client Team on either 01245 493 959 (Chelmsford office) or 01702 298 282 (Shoeburyness office).