Do pilot trusts (including spousal bypass trusts) need to be registered on the TRS?

We are aware that there may be some confusion as to whether pilot trusts (including spousal bypass trusts used to accept pension and death-in-service scheme death benefits) require registration on the Trust Registration Service (TRS), especially where no further assets have been added to the trust.

To start, it is worth looking at the fundamental requirement that a valid trust must contain some trust property. In the case of pilot trusts, the initial property added to the trust is generally a nominal cash sum (say, £10) or a covenant that the settlor will pay a cash sum (say, £10) to the trustees on demand. In both of these cases, the trust, once established, has an initial value of the amount of the cash sum or value of the covenant, as appropriate (in the examples given above, this is £10).

Once the trust deed for the pilot trust has been fully completed, signed by the settlor and any trustees appointed in the deed (with each signature properly witnessed) and dated, a valid trust exists. This is typically a discretionary trust that can accept the addition of any asset (so, in the case of spousal bypass trusts, additions are not limited to, say, pension scheme death benefits and/ or death-in-service scheme death benefits).

There is a common misconception that a pilot trust used as a spousal bypass trust is ‘dormant’ or ‘does not come into force’ until such a time that the settlor dies. This view is not correct and, as can be seen above, a valid trust exists once the trust deed is fully completed and signed by the relevant parties.

The rules regarding registration of pilot trusts on the TRS are included in page TRSM23090 of the TRS Manual. These rules are summarised below:

  • A pilot trust that was set up before 6 October 2020 can qualify as an excluded trust, meaning that the trustees are not required to register the trust on the TRS, provided that the value of the trust does not exceed £100, in total. Once the value exceeds £100, the trustees are required to register the trust at that point.
  • A pilot trust established after 5 October 2020 requires registration, regardless of its value or whether additional assets have been added.

In any event, trustees of pilot trusts which qualify as excluded trusts, and their advisers, may wish to consider registering the trust voluntarily on the TRS to meet their general duties of record keeping. Further details are available here.

Our website provides further information on the TRS, trustees’ duties and responsibilities and on how we can register trusts on the TRS on the behalf of trustees.

pilot trust spousal bypass trusts