Do I need to register my Trust with HMRC?

Changes to the law have significantly expanded the scope of trusts that need to be registered on the HMRC Trust Register. Trusts affected by the new changes must register with TRS by 1 September 2022.

Following the Fourth Money Laundering Directive, a Register of Trusts, maintained by HMRC was introduced, which is known as the Trust Registration Service or “TRS”. This imposed requirements on various trusts, including requirements to provide certain details about the trust for inclusion on the Trust Register and to keep those details up to date. The information to be provided includes details of the trustees and certain beneficiaries and certain information about trust assets.

The rules as to which trusts were required to register with the TRS are complex but, broadly, registration is generally required (with certain exceptions) where the trust has a liability to UK tax.

As a result of the Fifth Money Laundering Directive, the scope of trusts that need to register with TRS has been significantly expanded and now includes most UK trusts (even if they don’t pay UK tax) and non-UK trusts with certain UK connections. There are some exceptions, but these are limited. Trusts affected by the new requirements must register with TRS by 1 September 2022.

It should be noted that the definition of a “trust” for the purposes of these requirements is very wide: for example, the registration requirements apply to most fixed trusts (trusts fixed for the absolute benefit of certain individuals) and to properties where not all the beneficial owners are registered as owners at the Land Registry (subject to certain exemptions).

Example:

Cathy’s late husband, Derek, died in 2001. In his Will he left a gift of his available Inheritance Tax “nil rate band” to a discretionary trust and the rest of his estate to Cathy. The trust, which is still in existence, was funded by a charge over Cathy and Derek’s home. No income has been generated from the trust fund and the trust has never triggered any liability to UK tax.

The trust is now required to register with TRS and should do so by 1 September 2022.

Financial and other penalties may be applied against trustees who fail to register on time, and, in extreme cases, criminal sanctions may apply.

Further information about the trust registration requirements can be found on the gov.uk website.

What should I do?

Trustees of trusts not already registered with TRS should review the new rules and consider whether they need to register. 

If you would like us to advise you on the new rules or assist with registration of the trust, please contact our Trust Team on the details shown below.

Call our specialist solicitors on 0808 231 1320

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