Have You Registered Your Trust with HMRC?

By Kate | September 6, 2022

The 1^st September 2022 deadline for Trust registration has been and gone – and only 61,700 of one million non-taxable UK trusts had registered in the first six months of 2022. Those who failed to register could face penalties of up to £5,000.

These figures suggest that many trustees are still unaware of their obligations – if you’re unsure whether or not your trust has been registered (or needs to be), it’s vital to speak to an advisor as soon as possible.

Table of Contents

Why Do You Need to Register Trusts?

HMRC introduced the Trust Registration Service (TRS) in 2017, to:

Combat money laundering
Give transparency to beneficial ownership of trust assets
Digitalise trust registration

Previously, only tax-liable trusts had to be registered, but last year, requirements expanded to non-taxable trusts as well – with exemptions for pensions and charitable trusts.

A “Will trust” is an example of a non-taxable trust. This is a trust set up where, when a person passes away, their property (or a share of it), is held in trust so that their spouse/civil partner can continue living in the property. However, if the living partner will only hold the assets for two years after their partner’s death, the trust doesn’t need to be registered.

Trust Registration Deadlines

Trustees must be aware of the following deadlines for non-taxable trusts, otherwise they may face penalties:

Set up before 6^th October 2020: register by 1^st September 2022.
Set up between 6^th October 2020 and 2^nd June 2022: register by 1^st September 2022. Even if your trust has since ceased, you still need to register, and immediately close the record
Set up on/after 3^rd June 2022: register within 90 days of creation – unless the trust is excluded

What Happens if You Don’t Register?

If you deliberately fail to register your trust, you could face penalties of up to £5,000. However, as these requirements are still unfamiliar for many individuals, HMRC may not issue penalties for first time offences.

Information for Trust Registration

The following information is required for trust registration with the TRS:

Trust’s name
Date the trust was created
Trustees – their full names, addresses, dates of birth, and National Insurance numbers
Trust Beneficiaries: their full names, dates of birth, National Insurance numbers, and country of nationality
Assets: details and value of trust assets

Which Trusts Don’t Need to Register?

If any of the following apply, you don’t need to register your trust with the TRS (unless it’s liable to UK tax):

Pension – the trust holds money/assets of a UK-registered pension scheme
Life/retirement policies – the trust holds life or retirement policies that pay out on death, terminal/critical illness, or permanent disablement (or to meet associated care costs)
Insurance policies – the trust holds insurance policy benefits given within two years of the assured person’s death
Charity – the charitable trust is UK-registered, or isn’t required to register as a charity
Pilot – a “pilot” trust set up before 6^th October 2020, and holds up to £100
Co-ownership – a trust set up to hold jointly owned shares as “tenants in common”
Bereaved – a trust set up under the will/intestacy of a deceased parent (or Criminal Injuries Compensation Scheme) for bereaved children under 18, or adults aged 18-25
Professional services – a “financial” or “commercial” trust set up through professional services or business transactions for holding client’s money or assets