
HMRC’s Trust Registration Service (TRS) was set up to meet the government’s commitments under the fourth and fifth EU Money Laundering Directives. New rules came into effect on 6 October 2020 which meant that the majority of trusts set up during the settlor’s lifetime need to be registered, even if there is no tax liability.
There are two separate reporting requirements within the TRS, which are:
- Taxable trusts (i.e. trusts which have a UK tax liability, which could be income tax, capital gains tax, inheritance tax, stamp duty land tax). This would include discretionary and interest in possession trusts; and
- Non-taxable express trusts (i.e. trusts created by a written deed, for example, an investment bond or regular premium investment plan). Bare trusts are included within this definition.
- Non-UK trusts which have acquired UK land, or have a UK business relationship, since 6 October 2020.
The deadline for trust registration is 1 September 2022 for:
- Taxable trusts which were created on or after 6 April 2021.
- Previously non-taxable trusts that are liable for tax for the first time.
- Non-taxable express trusts which were created on or after 6 October 2020. This includes trusts that have since been closed.
For trusts created on or after 1 September 2022, these must be registered within 90 days of the trust’s creation date.
The responsibility for registering the trust and maintaining accurate and up to date records lies with the trustees.
HMRC will levy fixed penalties for late registration of a trust, as follows:
- Registration made up to three months after the due date – £100 penalty.
- Registration made between three and six months after the due date – £200 penalty.
- Registration more than six months late – the greater of 5% of the tax liability or a £300 penalty.
If you are unsure if you have a trust, or whether you are impacted by these rules in any way please contact us.