Halfway point for registration of trusts on HMRC’s Trust Registration Service (TRS).
Today, 28 February 2022, marks the halfway point for registration of trusts on HMRC’s Trust Registration Service (TRS).
New rules introduced on 1 September 2021 gave until 1 September 2022 for all UK express trusts (and some non-UK express trusts) to be registered on the TRS unless the trust qualifies as an excluded trust. It is the trustees’ responsibility to register their trust(s), although they are able to appoint an agent to register on their behalf.
Whilst the exact number number of trusts that will require to be registered is unknown, estimates place the number at somewhere between several hundreds of thousands to over a million. Anecdotal evidence suggests that the vast majority of trustees have not yet taken any action around starting the registration process. Whether this is because they are not aware of the new rules and the requirements to register or, perhaps, that the 1 September 2022 is still a long way away, remains to be seen but financial advisers with trustee clients should be alerting them to the need to register.
To date, there has been very little coverage in the media; only the financial press seems to have discussed the need to register trusts in any detail.
HMRC has indicated that trustees who fail to register their trusts could be liable to fines and/ or penalties, although they have not indicated what these may be or when they may start to apply.
HMRC also issued some updates to the TRS Manual on 24 and 25 February 2022. Whilst most of these provide clarification to existing clauses, that dealing with how beneficiaries are recorded on the TRS is of particular interest and will cause more beneficiaries to be individually named when a trust is registered and, potentially, for trustees to need to update the Trust Register if, for example, a child or grandchild who qualifies as a (potential) beneficiary of the trust is born.
A new page was also added to the TRS Manual which can allow a bank account opened for a child under the age of 16 or a person lacking mental capacity to be treated as an excluded trust. This exclusion only covers cash deposits – if any investments are also held, the trust will require to be registered.
Trustee Support Services can register trusts on behalf of trustees. Full details of our services are available on our website.
The clock is ticking down towards the 1 September 2022 so we would recommend that action to start the trust registration process is taken now rather than waiting any longer.