Ensure your trust is properly registered with HMRC before the deadline

There are now 3 months to go before the 1 September 2022 deadline for trustees to register existing trusts on HMRC’s Trust Registration Service (TRS).

UK express trusts (generally, trusts created by a trust deed, declaration of trust, will or deed of variation) and some non-UK express trusts require to be registered on the TRS unless they qualify as an excluded trust. However, trustees of an excluded trust may also wish to consider voluntary registration on the TRS to fulfil their general record keeping duties. It should be noted that a trust that incurs a UK tax liability cannot qualify as an excluded trust (even if it previously qualified before the tax liability arose).

Anecdotal evidence suggests that the trustees of several hundreds of thousands of existing trusts still need to take action to meet the 1 September 2022 deadline. Trustees (and their advisers) should, therefore, consider registering their trust(s) sooner rather than later.

Trustees of trusts created after 2 June 2022 have a deadline of 90 days from the date of the trust’s creation to register the trust on the TRS. From a practical perspective, it would be sensible for trustees to consider registering the trust (unless it is an excluded trust) when it is created.

Trustees who fail to register their trusts (unless an excluded trust) by the relevant deadline not only face potential penalties from HMRC but may also encounter difficulties when administering their trust.

From 1 September 2022, ‘obliged entities’ (also known as ‘UK relevant persons’), which include financial institutions and intermediaries, must ask for proof of a trust’s registration on the TRS (or its exemption) when establishing a new business relationship with the trustees. It is also likely that some entities will look to ‘gold plate’ the rules and ask for proof of registration or exemption from existing business relationships.

Trustees of registered trusts can download a certificate as proof of registration here by logging into their account. The certificate can be printed or saved as a pdf file. If any changes are made to the details held on the Trust Register (for example, changes to a trustee’s or a beneficiary’s details), a new certificate should be generated.

Trustee Support Services has developed documentation to create a bypass trust that does not require registration on the TRS until such a time that it receives additional assets or incurs a tax liability. Whilst this documentation cannot be used to amend existing bypass trusts, we believe that it may be of significant interest to many advisers. If you are interested in acquiring a licence to market this, please contact us at contact@trusteesupportservices.com and we will be happy to provide full details.

The responsibility for registering a trust lies with the trustees and they can register their trust on gov.uk. However, many trustees may find the registration process daunting and time-consuming and may prefer to appoint an agent to register their trust on their behalf.

Once a trust has been registered, trustees are required to update the Trust Register with any changes to the details provided. Such changes must be notified (via gov.uk) within 90 days of the date of the change. Trustees of taxable trusts are also required to make a declaration by 31 January each year that the trust details held on the Trust Register are accurate and up-to-date, even if no changes have occurred.

A trust that was in existence on 6 October 2020, but that has subsequently been closed, is still required to be registered (unless it was an excluded trust). Once registered, the trustees should then update the Trust Register to mark the trust as closed.

Trustee Support Services can register trusts on behalf of the trustees and also provide bespoke consultancy services to trustees and their advisers.

Categories: Trust registration