In 2017, HMRC introduced the Trust Registration Service (“TRS”) – an online register of trusts – as part of a European initiative to tackle Money Laundering and the financing of terrorism. Whilst the requirement to register a trust on the TRS was initially limited to those trusts that incurred a tax liability, relatively recent changes in the TRS rules mean that almost all trusts now need to register on the TRS even if no tax liability arises. Trustees should therefore reassess their position urgently to avoid incurring HMRC penalties for non-registration.
The requirement for all trusts to register on the TRS is subject to some specific exclusions, such as charitable trusts, but even excluded trusts will need to register if they have a liability to tax.
We recommend taking stock now. Is it possible that you have set up a trust in the past, or you are now or have been a trustee? Bear in mind, however, that what constitutes a trust is not always obvious.
For example, opening a cash deposit account for a minor is a bare trust – albeit one that is excluded from registration on the TRS – whereas investing in stocks and shares for a minor is a bare trust which is not excluded from registration. For the avoidance of doubt, the rules do not apply to Child Trust Funds, nor Junior ISAs.
The deadline to register trusts created on or before 6 October 2020 was 1 September 2022. Trusts created after 6 October 2020 must be registered within 90 days of their creation. In an administrative quirk, trusts in existence on 6 October 2020, but which have since been wound up, must also be registered and then removed from the register!
If you have any queries or concerns about trust registration – or trusts in general – then please do let us know.
