An update for trustees – one year on
The trust registration deadlines
We are now one year on from the 1 September 2022 trust registration deadline when most trusts in existence at 3 June 2022 were required to have been registered on the Trust Registration Service (TRS). Any trusts created after 3 June 2022 that require registration have 90 days from the date of the trust’s creation to be registered. Trustees of a trust which requires registration but which has not been registered by the relevant deadline could face enforcement action from HMRC who can levy a penalty of up to £5,000 per offence.
Similar penalties can be applied to trustees who have registered a trust on the TRS but the registered information is either incorrect or has not been maintained as up-to-date and accurate – should the registered information change, the trustees then have up to 90 days to update the Trust Register.
Certain trusts, known as excluded trusts, either do not require to be registered on the TRS or only require to be registered after a period of time (depending on the type of trust). It should be noted that, if a trust incurs a UK tax liability, it then requires to be registered. The TRS is now the only route for trustees (or those administering an estate) to obtain a Unique Taxpayer reference (UTR) to allow an SA900 Trust & Estate tax return to be submitted to HMRC.
A trust is deemed to be a taxable trust if it incurs a liability to any of: income tax, capital gains tax (CGT), inheritance tax IHT), stamp duty land tax (SDLT), land & buildings transaction tax (LBTT) in Scotland, land transaction tax (LTT) in Wales and/ or stamp duty reserve tax (SDRT).
What to do if you’ve missed the registration deadline
Anecdotal evidence suggests that a large number of trustees who should have registered their trusts on the TRS have yet to do so. Indeed, many of the trustees that we speak to have only just found out that their trust needs to be registered. Whilst they may have missed the registration deadline, we would recommend that they consider registering sooner rather than later.
How will HMRC know if I haven’t registered my trust?
From 1 September 2022, trustees who are looking to establish a business relationship with an ‘obliged entity’ (also known as a UK relevant person) will be asked to provide proof of the trust’s registration on the TRS (or exemption from registration, if appropriate).
Obliged entities include financial institutions, such as banks, building societies, insurance companies and investment providers, accountants, solicitors, tax advisers and other intermediaries. Many obliged entities are also asking trustees where there is an existing business relationship for proof of registration or exemption.
Proof of a trust’s registration
The proof of a trust’s registration is provided by the trustees downloading a digitally signed pdf certificate from the Trust Register. The obliged entity will also, typically, insist that this certificate carries a recent date. If we register a trust on the trustee’s behalf, we will provide a copy of the certificate along with the other trust registration documents but, if an updated certificate is required, this can be obtained by accessing the Trust Register.
The obliged entity is required to check the details on the certificate with any information that they hold in their records and, if there are any anomalies to try to resolve these with the trustees. Similarly, if a trust has not been registered, the obliged entity will ask the trustees to register the trust (and provide the proof of registration certificate). This process was covered in more detail in an earlier blog.
If any anomalies in the information cannot be resolved, or if the trustees fail to register a trust requiring registration, the obliged entity is then required to report the trustees to HMRC who may then consider taking enforcement action.
Can I get help with registering a trust or updating information?
Trustee Support Services can assist trustees with registering a trust or updating the trust’s information held on the Trust Register. Our fee for trust registration is currently £200 + VAT (£240 including VAT) per trust. We have tried to keep the process for registering a trust through us as simple as possible.
Our fee for updating or amending information held on the Trust Register will be based on the time spent in making the changes – we are happy to provide a quote in advance. You can contact us at email@example.com or call 07885 296789.
How else can Trustee Support Services help me?
We can provide a range of services to trustees and their advisers, including reports on particular aspects of a trust and drafting deeds and other documents, for example to add and/ or remove trustees to a trust or to remove a beneficiary etc. Please feel free to contact us to discuss your requirements – if we are not able to help you, we might just know someone else who can!