You may have recently heard about the Trust Registration Service HMRC has introduced. If not, don’t worry! You can find our further information below about this service and what the requirements are moving forward.
Trust Registration Service
What is this? As part of the 5th Anti-Money Laundering Directive, HMRC requires certain trusts to be registered on their Trust Registration Service (TRS). The previous rules were that only trusts had to pay tax to pay needed to register. However, the new rules now extend to most trusts, regardless of their tax status.
Which trusts need to be registered?
All UK resident express trusts need to be registered! If any of the following apply, the trust will need to be registered:
• All trustees are UK residents
• There is, as a minimum, one UK resident Trustee and the settlor is resident.
• There is, as a minimum, one UK resident Trustee and the trust enters a UK business
• The trust holds UK property or land.
• The trust holds UK asset and had a UK tax liability.
What do some of those terms mean?
An individual which is UK resident in accordance with the statutory residency test. Or a corporation registered in the UK.
Any trust, written or otherwise, where a settlor has established a trust by their own intention. For example; using a Discretionary Gift Trust deed. A trust is not an express trust if it is a resulting or statutory trust, these are established through an operation of law. For example; a trust for a minor child as a result of their parent dying intestate.
UK Business Relationship
A business, professional or commercial relationship between the trust and a UK ‘obliged entity’ (any entity which is bound by the 5th Anti-money Laundering requirements). Particularly where that relationship is long term. This definition can be complex, so for the avoidance of doubt, this would include a relationship with a UK based financial adviser or discretionary fund manager.
What are the deadlines for registering?
After 5 April 2021 after 3 June 2022 within 90 days of the first relevant tax liability arising.
The deadline for registrations for non-taxable trusts in existence on 6 October 2020 is 1 September 2022, this also applies even if the trust has since been closed.
Non-taxable trusts created after 6 October 2020 must register within 90 days of being created or otherwise becoming registerable, or by 1 September 2022 (whichever is later).
HMRC has confirmed that non-taxable trusts set up on/after 6 October 2020 but wound-up before 1 September 2021 will still need to register on the TRS (and then close the trust record), however it will take a proportionate approach in relation to any such trusts which do not meet the registration deadline.
How do I register my trust?
To register your trust you need to go to this link – https://www.gov.uk/guidance/register-a-trust-as-a-trustee and register as a trustee. This can only be completed online.
An Organisation Government Gateway user ID will need to be created before the trust can be registered on the TRS.
Who needs to register my trust?
Only the ‘lead Trustee’ can register the trust. So, although all of the Trustees are responsible for ensuring the trust is registered, only one trustee can use the trust registration service. Therefore, the Trustees will need to decide who will register the trust. They will be known to HMRC as the ‘lead Trustee’.
However, while you, as a trustee, is responsible in ensuring that a registrable trust is registered on the TRS, trustees can appoint an agent to act on their behalf for trust registration. You accountant can therefore help you with this. If you do not have an accountant and would like help, we have can put you in contact with some trusted accountants.
What information is on the register?
For each of the Settlors, Trustees and named beneficiaries, the Trustees will need to put on the TRS:
• Full name;
• Date of Birth;
• Country of residence;
• Nationality of residence;
• Role in the Trust; and
• Mental capacity.
The Trustees will be asked to nominate a ‘lead Trustee’ and for that person additional information will need to be given:
• National Insurance Number;
• Passport number and expiry date;
• Unique Tax Reference Number;
• Telephone number; and
• Email address.
The information needed for the Trust itself is:
• Name of the Trust;
• Date it was set up;
• Details and values of the assets in the Trust at the time of registration;
• Country in which the Trust is administered;
• Whether it is an Express Trust or not; and
• Whether it is taxable or not.
Discretionary trusts often specify beneficiaries as ‘classes’. E.g., Children or Grandchildren. If this is the case, the trustees will only need to list the class of beneficiary and no further personal information is required.
The trustees are also required to supply information about the trust, including:
• Date the trusts was created;
• Confirmation of the type of trust (e.g., express trust);
• Details of any UK business relationship (applies to non-resident trusts only);
• Details of any UK land or property the trust holds.
How long does it take to complete the TRS?
It is important you have all of the information available to you as in doing so, this should only take you a few minutes to complete.
Guidance when registering your trust
When registering the trust, most elements of the process are simple, and the Gov website is fairly self-explanatory. There are small bits which may cause confusion, and we have highlighted these below:
• If your trust has a non-UK connection i.e. a trustee or beneficiary living outside of the UK, you may need to register the trust in that country also. In this event, we recommend seeking tax advice local in that country.
• You are able to use the same email address for more than one user ID.
• When asked if you are registering an ‘express trust’ the answer will likely be yes. Please confirm this with your adviser if you need to.
• For the trust’s name, you should use whatever it is named as on any documents you have had previously. If there is no name, create one.
• If your trust is a ‘Will Trust’, enter the creation date as the date of death.
Changes to the trust
Any future changes made to the trust must be updated on the TRS within 90 days of the change. Failure to do so could lead to a fine from HMRC.
If you have any questions please get in contact. We will be happy to help where we can.
The Audley Wealth Team