What is the Trust Registration Service?
The Trust Registration Service (TRS) was established in 2017 in response to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. A major area of concern is that money can be “hidden” inside legal vehicles such as companies and trusts.
As a result, the Fifth Anti-Money Laundering Directive introduces regulations that mean that:
- All trustees need to keep records of the details of their trusts – for example names and address of the settlor(s), trustees and beneficiaries and details of the trust assets.
- Most trustees will need to disclose certain key information on their trust(s) to HMRC by being recorded on the Trust Register (accessed through the Trust Registration Service). Trust, in this context, means a trust that is a legal vehicle.
Prior to 2017, many trusts were required to notify HMRC of their existence using Form 41(g). This was superseded in 2017 by the Trust Registration Service as an online service.
Under the initial versions of the Trust Registration Service, only trusts which had incurred a tax liability (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 or stamp duty reserve tax (SDRT) were required to register, although trustees could voluntarily register other trusts. In 2018, the service was expanded to allow trustees to notify HMRC of changes to trustees, beneficiaries and the operation of the trust.
New rules enacted in the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020 (SI 2020/991), which came into effect on 6 October 2020, expanded the scope of the Trust Registration Service, leading to a requirement for many more trusts, indeed, most trusts, to register. Registration was, however, delayed whilst HMRC developed the Trust Registration Service and associated rules to enable this wider scope. The new system went live on 1 September 2021 meaning that almost all trusts are now required to be registered, even if they have not incurred a tax liability.
Some exclusions to registration do, however, exist. These exclusions apply to trusts where the perceived risk of money laundering is low – for example trusts of registered pension schemes or trusts that arise by the operation of the law when a person dies intestate (without making a will). More detail on excluded trusts is available here.
Given the general requirement that trustees need to retain all information on trusts, even if a trust is excluded from registration, it may be worthwhile trustees opting to register the trust on the Trust Registration Service as this will be a very convenient way of recording all necessary information, should they be requested to provide it. Details of the information that the trustees are required to keep are available here.
The responsibility for registering a trust lies with the trustees. Under the new version of the Trust Registration Service, registration is also the only route now available for trustees or the personal representatives of an estate to obtain a unique taxpayer reference (UTR) to enable submission of a self-assessment SA900 Trust and Estate tax return.
Each trust must be registered individually and each registration requires a separate government gateway account.
HMRC provides broad guidance on different types of trusts and whether they are required to register on the Trust Registration Service.
Trustees of trusts created before 1 September 2022 must register their trust by the later of 90 days after the creation of the trust or 1 September 2022. Trusts created after 1 September 2022 are required to register within 90 days of the trust’s creation date. Similarly, trustees must update their registration for any changes to the details of the trust within 90 days of the date of the change.
If a trust that was previously an excluded trust is registering because it has incurred a tax liability, it must register by 31 January following the end of the tax year in which the tax liability arose. However, this date is brought forward to 5 October following the year in which the tax liability arose if the trust has become liable to pay income tax and/ or capital gains tax for the first time. If a trust is liable to more than one tax and both deadlines apply, the trustees should register the trust by the earlier of the 2 deadlines.
Whilst an estate of a deceased person is not itself required to register under the Trust Registration Service, the personal representatives of an estate will have to register it if they need to complete a self-assessment SA900 Trust and Estate tax return because the Trust Registration Service is now the mechanism for them to obtain a unique taxpayer reference (UTR).
How Trustee Support Services Ltd can help trustees
Trustee Support Services Ltd (TSS) has been set up with the specific intention of helping trustees register their trusts with the Trust Registration Service.
In very brief terms, TSS will act as agents of the trustees to register the trust on behalf of the trustees and so enable them to satisfy their obligation to disclose details of their trust. To do so, the trustees will need to create a secure account with TSS, provide a completed trustee questionnaire and pay a fee. During our launch period, this fee is £200, but is likely to increase in the future.
This service is only available to trusts where:-
- There are no professional or corporate trustees; and
- None of the trustees are resident outside the UK.