Back in 2017 (we know, this feels like a lifetime ago), HMRC announced the Trust Registration Service (TRS) with the aim to reduce the volume of taxable trusts being used to hide the activity of money laundering.
But why are we talking about this now? Shouldn’t this be old news by now? Well, following the implementation of the EU’s 5th Money Laundering Directive, HMRC have now extended the TRS to include non-taxable express UK trusts, and the deadline to register is 1st September 2022 – just over a week away.
We sat down with Tax Manager, Shannon Minor, to answer any questions trustees may have and find out what needs to be done before Thursday 1st September.
Do I need to register?
Not everyone will need to, but now the TRS is inclusive of non-taxable trusts, there is a much higher chance of trustees needing to get registered. Some examples include:
- All UK express trusts – unless they are specifically excluded
- Non-UK express trusts (e.g. trusts that acquire land or property in the UK, or have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK).
- Bare trusts – parents holding assets (such as shares, premium bonds, real estate) for their children.
- Nominee arrangements where an individual where an individual holds an asset, as a nominee for another person, that are documented in a Nominee Agreement.
The list goes on, so if you’re unsure whether this applies to you, I’ll be happy to chat this through with you and see if you fit the requirements. Failing to register can result in a fine of up to £300 – so it’s better to be safe than sorry!
Are there any exemptions?
There some exceptions to the new TRS rules, however these are quite specific; for example, you don’t need to register if the trust is holding insurance policy benefits received after the death of the person assured, but the benefits must have been paid out from the trust within 2 years of the death. Or if it is a ‘pilot trust’ that holds no more than £100, but this only applies to those set up before 6th October 2020, so make sure you don’t get caught out by the fine print.
I’ve had a trust for years – does this still include me?
Yes, any non-taxable trusts created on or before 6th October 2020 must be registered by 1st September 2022.
What if I’ve only recently set up a trust?
As there will be trusts set up after the deadline, the rule going forward is that you must register within 90 days of its creation – so this applies to any recent set ups. For example, if you set up your trust on 21st July, you won’t need to register until 19th October 2022 – however I would recommend getting it sorted as soon as possible so it’s one less thing to worry about.
What information will I need to give when registering?
To get the process kick started, you’ll need:
- The name of the trust
- The date the trust was created
- To say if the trust is an express trust or not
- Details about whether a non-UK trust has a business relationship in the UK
- Details about any UK land or property that the trust has purchased
This information can be found in the trust deed or from any communication you’ve had with HMRC. Following this you’ll need to appoint a ‘lead’ trustee to be the main point of contact for HMRC along with a list of information about them. You’ll also need to do the same for any beneficiaries.
You can find a full list of what you’ll need on the Government website, but if you’re struggling to find the time to have a proper look through this, get in touch and our team can help guide you through the process.