The Trusts Registration Service was created when the government introduced legislation requiring all trustees to comply with registration obligations under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 which came into force on 26 June 2017. To start with all trusts that had a tax liability had to be on the register by 31 January 2018.
Over the years, HMRC have extended the scope of trusts needing to register. With effect from 1st September 2022 all trustees must register their trusts on the Government’s Trust Register whether the trust is active or dormant and whether or not there is any liability to tax. This includes Bare Trusts, Interest in Possession Trusts, Discretionary Trusts, A&M Settlements and almost all property held in trust where the legal owners are not identical to the beneficial owners. This also includes non-express trusts, where you may hold assets for the benefit of another individual without taking formal steps to record such arrangements.
Trustees of taxable trusts should already be registered, whereas trustees of trusts without a tax liability are required to register their trusts by 1 September 2022. For any new trust created from 1 September 2022, they must be registered within 90 days of creation. As is always the case with HMRC, there are penalties for non-compliance with these new rules.
If the trust is taxable the Trust Register will need to be updated annually or a declaration made that there are no changes. If the trust is not taxable then an annual declaration is not required, unless administrative changes have occurred (for example, a trustee’s personal details have changed).
Since the Government’s Trust Register is exclusively computer based, ideally the Lead Trustee should arrange to register their trust. Alternatively, an Agent may act on behalf of the Trustees to register their trust. However, if an Agent has registered the trust, they cannot see it again until the Lead Trustee has claimed the trust and gives them access as Agent.
To claim the trust, the Lead Trustee will be required to set up a Government Gateway Account, and pass security questions based on details of the trust. This also allows them to appoint an Agent, if they so wish, giving the Agent access to the trust’s register enabling them to undertake any annual declarations required on behalf of the trustees.
Bishop & Sewell would be pleased to assist with the initial trust registration. If we are appointed by you as your Agent, we could then also deal with the annual updates on your behalf if you so wish.
If you are in need of advice or assistance on any of the issues mentioned in this article please contact Mike Romain or Humaira Omran or another member of our expert Private Client Team on 020 7631 4141 or email email@example.com
The above is correct as at 11 April 2022. The information above may be subject to change as this is a constantly evolving situation.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.