From 1st September 2022 all Trusts, including those created by a deceased person’s Will, must be registered with the new HMRC Trust Registration Service.
We have prepared a list of Frequently Asked Questions to assist you:
Q. Why has HMRC introduced a requirement to register Trusts?
The requirement to register Trusts has been brought in to strengthen compliance with anti-money laundering regulations and provide a clear record of the legal owners (Trustees) and the beneficial owners (Beneficiaries) of UK Trust assets.
Q. What is the Trust Registration Service (TRS)?
The TRS is an online system created by HMRC by which Trustees (administrators of the Trust) can register the Trust they are responsible for.
Q. When does this requirement begin?
Existing Trusts must be registered by 1 September 2022 to comply with the new regulations and ensure no penalties arise. After 1 September 2022 all Trusts newly created must be registered within three months.
Q. When does a Trust within a Will start to exist?
Upon the death of the person whose Will it is.
Q. Who is responsible for registering the Trust and keeping the TRS register updated?
The Trustees are responsible for appointing a Lead Trustee, who must take responsibility for registering the Trust, or appointing an agent to so. The person whose Trust it is (the Settlor) will normally nominate the Lead Trustee. The Lead Trustee must first get an organisational government gateway account to register the Trust.
Q. What is involved in registering a Trust with HMRC?
The Lead Trustee must:
- Create an HMRC login to be access the Trust registration service.
- Complete seven sections including:
- Trust details
- Settlor details (name, date of birth, National Insurance number, address, telephone number, country of residence and of nationality)
- Trustee details (as above)
- Beneficiary details (as above) – all living (potential) beneficiaries must be named when they receive a financial or non-financial benefit from the Trust.
- Company ownership or controlling interest, where applicable
- Protectors, where applicable.
- Other individuals.
The Lead Trustee has 28 days from starting the submission to complete it. Although this runs to about 60 screens/questions to answer most are fairly easy.
- Notify HMRC of any changes and keep the Trust record up to date within 90 days of that change. The Lead Trustee must also update the TRS every time a new grandchild or great grandchild is born if they are named as dependents of the Trust. Regular reviews of the Trust are therefore essential.
Q. What are the penalties if my Trust is not registered in time?
HMRC can apply penalties ranging from £100 up to £300 for failure to comply with registrations and updates for Trusts.
Q. Will closing down the Trust avoid the need to register it?
No, you are still required to register your Trust.
Q. What are the deadlines for Trust registration and updating the TRS?
The deadline and timescales for the registration of existing or new Trusts are as follows:
- Non-taxable Trusts (e.g., most of those set up in Wills) in existence on or after 6 October 2020 must be registered by 1 September 2022 (even if they are now closed).
- Non-taxable Trusts created after September 2022 must be registered within 90 days.
Changes to the Trust details or circumstances must be registered within 90 days of the change.
Q. What Trusts are exempt from registration on TRS?
Trusts created by a Will are excluded from registration for a period of two years following the death of the person whose Will it is (the Testator/Settlor) to allow for dealing with that person’s estate, i.e. applying for a Grant of Probate. If the Trust is still in existence at two years from the date of death, or if at any date beforehand the Trust accepts an addition of property from outside the estate, it will then need to register immediately.
Additionally, Trusts set up for Bereaved Minors (under 18) and age 18-to-25 Trusts are excluded when the conditions of section 71A of the Inheritance Tax Act 1984 are met, i.e. the Bereaved Minor becomes absolutely entitled to the Trust property on or before they turn 18.
Q. Who do I need to tell that the Trust is registered?
Third parties are required to have formal confirmation that the Trust is registered and up to date on TRS before they can act for you. For example, if you wish to sell a Trust property the estate agent and conveyancer will need to see evidence in the form of a certificate downloaded from the register.