The scope of trusts which must be registered with the Trust Registration Service (TRS) has recently been widened, meaning all UK express trusts, save for a small handful of exceptions, must be registered with TRS by 1 September 2022, or 90 days after their creation if later.
The change comes as a result of the UK implementing the Fifth Anti-Money Laundering Directive in an attempt to increase the transparency of the beneficial ownership of trusts in the UK.
The new regulations require trustees to register express trusts with the TRS and also to keep the TRS updated with any changes to the trust going forward within 90 days of becoming aware of the change. The responsibility is, therefore, an ongoing one and falls on all trustees of the trust, not just the nominated lead trustee who will be appointed during the registration process.
Which trusts need to be registered?
The requirement applies to all UK express trusts save for a few exceptions. These include, but are not limited to:
- charitable trusts
- statutory trusts
- trusts for a disabled person
- pilot trusts which hold no more than £100 and were created before 6 October 2020
- bereaved minor trusts and 18-25 trusts set up by the beneficiary’s deceased parent or under the Criminal Injuries Compensation Scheme
- personal injury trusts
- certain life and retirement policies (subject to certain conditions)
Please note that if a trust is liable to pay UK tax, it will still need to be registered even if it falls within one of the exemptions.
Don’t get caught out
While for some trusts it is clear whether it falls within the requirement to register, for others it is much less obvious. For example, it is necessary to register deceased estates which have not been distributed within two years of the date of death, unless they are intestate.
In addition, any trust that was registerable on or after 6 October 2020 but has since been wound up will need to be registered and then the trust record closed immediately.
Property trusts will also need to be registered if the beneficial owners of the property are different to the legal owners named on the title.
It is therefore important for trustees to give proper consideration as to whether they are required to register their trust with TRS. The responsibility falls upon all the trustees and failure to register may result in a financial penalty.
How to register?
The registration process is carried out via HMRC’s online portal. Trustees will need to provide details of the trust, the trustees, the settlor and the beneficiaries. For trusts which are not liable to pay UK tax, there will be no requirement to provide details of the trust assets.
ACS can register the trust on your behalf as a trustee to save you the time of doing so. If you would like to instruct us to register your trust on your behalf, please contact Beth Parlane - firstname.lastname@example.org or 0121 214 3451.