With the deadline for registration of all UK express trusts on the Trust Registration Service (TRS) just one week away, now is the time to act if you are the trustee of a trust which has not yet been registered.  

Under the Fifth Money Laundering Directive, all UK express trusts must be registered by 1 September 2022, regardless of whether or not they have a tax liability, save for a small handful of exemptions. If you are not sure whether the requirement to register applies to you, be sure to check the TRS Manual from HMRC, which has recently been updated with new guidance and useful examples. For some trusts, careful consideration needs to be given as to whether the trust meets the requirements for registration, as it is not always obvious. We have considered some key points from HMRC's most recent guidance for those trusts which might not obviously meet the requirements.  

Trusts which have ended since 6 October 2020
For trusts which were in existence and registerable since 6 October 2020, they will be required to register even if they have since been wound up. If this is the case, the trust will need to be registered and then closed on the register straight away.

Estates
The requirement also includes estates which have not been distributed within two years from the date of death. The requirement for estates to register depends upon the wording of the Will. If the wording of the Will specifies that the assets, or any part of the assets, are left for the executors to hold on trust to distribute to the beneficiaries, then this trust will need to be registered. The trust becomes registerable after two years from the date of death, and will need to be registered within 90 days of this date. This will be the case even if the estate has already been registered as a complex estate. For intestate estates, or estates with a Will which does not specify that the estate is held on trust, they will not be required to register even if they are ongoing for over two years.

Deed of variations
When a deed of variation varies an estate to create an ongoing trust, there are a few important changes to take note of. The start date of this trust is the date of the deed of variation, rather than the date of death, and the settlor is the person who has varied the estate. Crucially, the ongoing trust must be registered within 90 days of the deed of variation, rather than after two years from the date of death.

Life interest trusts
When a Will creates a life interest trust over the deceased’s half share of the property, allowing the surviving owner to live in the property, the life interest trust must be registered. As it is a trust created by Will, it does not become registerable for two years following the date of death.

However, in situations where the deceased person owned half a share of the property, and the other half remains held by the surviving owner, the trust created over the property may need to be registered as a separate, additional trust. This will depend on whether the co-ownership exemption applies. For this exemption to apply, the people named on the legal title, in most cases the surviving owner together with the trustees of the life interest trust, must be the same as those with a beneficial interest in the property, which will be the surviving owner and all beneficiaries of the life interest trust. If this is not the case, then the co-ownership exemption does not apply and the trust over the whole of the property will need to be registered as a separate trust. The deadline to register this trust is within 90 days of the date of death.

The time to register is now
The deadline to register all existing trusts is 1 September 2022. HMRC have confirmed that they will be taking a light touch approach to failure to register by the deadline next week, and trustees will not be penalised for first-time failure to register, unless this failure is deliberate. While this offers some relief to those who have not registered yet, it is important to consider the requirements and register your trust as soon as possible. 

Anthony Collins Solicitors would be happy to assist you with the registration process, and we would be delighted to hear from you if we can help you meet your TRS obligations.