IMPORTANT INFORMATION CONCERNING TRUSTS
Trust Registration Service (TRS)
Following European wide anti-money laundering regulations, HM Revenue & Customs (HMRC) now require most trusts to be registered on their online TRS. The types of trust (unless excluded) that would need to be registered include:
- An express trust
- UK and non-UK trusts with a liability to UK taxation
- A Designated Unit Trust
- Any trust holding the surrender proceeds of a Protection Plan. A Protection Plan that is still in force does not need to register even if it has a surrender value
Although all Trustees are equally legally responsible for the trust itself, one Trustee must be nominated as a ‘Lead Trustee’ who will be the main point of contact for HMRC.
The process of updating the TRS is continuous and does not end once initial registration has been completed. Any changes to the Trustees or Beneficiaries, as well as when the trust is closed down must be updated to the TRS within 90 days.
Failure to keep the register up to date may result in a fine from HMRC.
Where there is a non-UK connection, for example a Trustee that is resident outside the UK in another European Economic Area (EEA) country then the trust may also need to be registered in that jurisdiction.
HMRC have confirmed that as the “registration requirement is a new and unfamiliar obligation for many trustees” there will be no penalty for a first offence of failure to register or late registration, but repeat offenders could face penalties of up to £5,000.
If the Trust is not registered, from September 2022 the Trustees may not be able to deal with any financial institution without showing a proof of registration.
HMRC have released further guidance to assist with the registration process.