TT348: HMRC’s Trust Registration Service (TRS)

May 18, 2021

There has been an obligation for Trusts to register with HMRC for many years if they have been liable for any of the following taxes:

  • Capital Gains Tax
  • Income Tax
  • Inheritance Tax
  • Stamp Duty Land Tax
  • Stamp Duty Reserve Tax
  • Land and Buildings Transaction Tax (in Scotland)
  • Land Transaction Tax (in Wales)

However, new rules were introduced on 6 October 2020, as part of the UK’s implementation of the Fifth Money Laundering Directive (5MLD), which extends the scope of the trust register to all UK and some non-UK trusts that are currently open, whether or not the trust has to pay any tax.

The trusts that need to be registered are:

  • all UK express trusts, unless they are specifically excluded;
  • non-UK express trusts that:
    • acquire land or property in the UK after 6 April 2020 and the trustees are listed as the legal owners at HM Land Registry.
    • have at least one trustee resident in the UK and enter into a ‘business relationship’ with a UK based service provider

There are also certain trusts that were originally expected to be outside the TRS that will need to be registered:

  • bare trusts, where the beneficial and legal owner are not the same, including the common instances where a parent holds property on trust for the benefit of a child, or where one spouse holds a property for the benefit of themselves and their spouse.
  • non-resident trusts that pay Stamp Duty Reserve Duty on the sale of UK securities.
  • trusts holding the benefit of life policies which can be surrendered at any time likely must register (but not if they can only pay out on death, illness or disability).
  • “complex estates”, where the total tax liability for the administration period is greater than £10,000, the gross estate is valued at more than £2.5 million, or the value of assets sold in any given tax year is in excess of £500,000.

The original deadline for existing trusts to register was 10 March 2022, but the new TRS is not currently operational and HMRC have indicated that there will be a 12 month window for trustees and agents to register once the service is up and running.  The service is now expected to be ready in the summer of 2021, so the deadline will now be around summer 2022.

When registering, the trustees or agents will have to give some basic information about the persons involved in the trust (the settlors and beneficiaries). This will apply to both taxable and non-taxable trusts.

Under the new rules, organisations and persons involved in preventative work in the field of anti-money laundering, counter terrorist financing and associated offences, can request access to details on the register about the people associated with a trust. The information should only be released on request in certain, limited circumstances.

If you have any questions, or would like assistance regarding preparation for or registering with the TRS, please do not hesitate to get in touch with your Barnes Roffe contact partner.

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