Did you know that most trusts, whether they have a UK tax liability or not, will now need to be registered on the Trust Registration Service (TRS)? It’s possible that some trustees are unaware of their TRS obligations or have neglected to register a trust given the turbulent times faced of late; however, as registration can be time-consuming, it’s important to understand the extended scope of the TRS as the registration deadline quickly approaches.
The TRS was established by HMRC in 2017 to comply with Anti-Money Laundering regulations and had the aim of improving transparency around the beneficial ownership of assets held in trusts. Previously, this applied only to trusts that incurred a tax liability, but new rules introduced in 2020 extended the scope of the TRS.
The new rules mean that most UK trusts – including non-taxable trusts in existence on or after 6th October 2020 – must be registered by 1st September 2022 or within 90-days of the creation of the trust, whichever is later. There are, however, limited exclusions that remain and as such, some trusts will fall outside of the TRS obligations.
The information to be provided on the trust register includes details of the ‘beneficial owners’ of a trust, such as settlors, trustees and beneficiaries, as well as details of the trust itself. Where there are changes to the information held, trustees have up to 90 days to update the register. Trustees of taxable trusts are also required to make an annual declaration to confirm that the trust’s details held on the register are correct and up to date.
What do you need to do?
TRS guidance is available on the Government website, however, if it appears complicated or you’re unsure of your obligations, we can offer guidance and support and even register a trust on your behalf.
There is a legal duty for trustees to comply with these obligations and potential penalties for non-compliance. Please contact our trust & estate tax manager, Claire Lightowler, if you need further support on email@example.com or 01244 404 420.