The UK Government adopted EU Money Laundering legislation in 2017 and this led to The Trust Registration Service (TRS).

Originally, only Trusts with a tax liability had to register; be they existing or newly created, if liable to pay any of the following taxes: income tax, capital gains tax, inheritance tax, stamp duty reserve tax and stamp duty land tax.

Registration with the TRS is an online process and involves entering the required information into the Trust Register administered by HMRC.

But from 6 October 2020, the Fifth EU Money Laundering Directive (5MLD) extended the registration requirement to the vast majority of trusts, including non-taxable trusts.  

HMRC added the ability to add non-taxable trusts to the Trust Register on 1 September 2021, with a 12-month deadline to meet the registration requirements by 1 September 2022. 

The current TRS regime: 

  • Existing trusts on or after 6 October 2020 must register by 1 September 2022  
  • New trusts created after 5 June 2022 must register within 90 days
  • Any trust changes must be updated on the Trust Register within 90 days of the change

Examples of trusts that now need to register:

  • holding investment bonds
  • holding properties in which beneficiaries are living
  • where the beneficiary receives income direct rather than it flowing through the trust

Penalties

HMRC has advised that they will initially take a ‘soft landing’ approach to penalties for not undertaking the relevant actions within the required timescales. 

Problems:

  • registering a trust on the TRS is not entirely straightforward
  • many trustees are unaware of this new compliance obligation  

How we can help

We can assist in the completion of a trust’s TRS registration, whether or not we are among the trustees.  Our fee for this work depends on the complexity of the trust.  We can also advise on all trust administration and tax compliance issues that relate to UK trusts, as well as their creation, amendment, and termination. 

With the increased compliance formalities that apply to trusts, if you are a trustee and you haven’t taken advice in the last couple of years, then now is the time to do so. If you have any questions relating to trusts or their taxation, please contact us today.