Changes to the rules regarding the Trust Registration Service (TRS) mean that more trusts need to be registered with HM Revenue & Customs (HMRC).
The TRS was introduced five years ago to make the beneficial ownership of assets held in trust more transparent.
While many trusts have had to sign up for the service already, the remit of the service recently expanded to encompass a greater number of, and more types of trust/s than before.
What changes are being made to the Trust Registration Service?
Previously, the requirement to register with the TRS applied only to trusts with a tax liability, but now all UK Express Trusts (subject to a few exclusions) need to register. This includes those established many years ago, which may have been forgotten about or left dormant, but which remain extant.
Taxable trusts
When it comes to registering a trust with a relevant UK tax liability, the deadline for registration will be decided by the date at which the trust was created, and when the first tax liability arises.
If the Trust was established before 6 April 2021, regardless of when the first relevant tax liability arises, there are a couple of deadlines to be aware of.
- 5 October – following the end of the tax year in which the first relevant tax liability arises, and this liability is to income tax or Capital Gains Tax (CGT)
- 31 January – following the end of the tax year in which the first relevant tax liability arises, in all other cases.
Where the Trust was established after 5 April 2021 and the first tax liability arises before 4 June 2022, the Trust must register with the TRS by 1 September 2022.
Where the same is true for the creation date, but the tax liability arises after 3 June 2022, the registration deadline is within 90 days of the first relevant tax liability arising.
Non-taxable trusts
Created on or before 6 October 2020
If the Trust meets the conditions for being registerable, registration must be completed on or before 1 September 2022.
Created after 6 October 2020
The non-taxable trust must be registered within 90 days of being established or 1 September 2022 (whichever is later).
Will your trust need to register?
If you operate a trust the answer is likely to be yes. Under the changes, only a limited number of exemptions exist.
Some other less common types of express trusts, that are set up for particular purposes are also excluded from registration unless they are liable to tax.
Be aware that this change to the rules means that, for the first time, some offshore trusts will also need to be registered.
How do I register for the Trust Registration Service?
To comply with the registration requirements, trustees will need to provide details of the settlor, trustees, and beneficiaries using an online portal.
At a minimum, trustees will need to confirm annually that there have been no changes and notify the TRS of any changes within 90 days.
Some trusts may have already completed a 41G form containing some of this information. However, HMRC has confirmed that this did not collect sufficient evidence to meet the requirements of the new rules.
Therefore, those trusts which registered separately with HMRC before, using this form, must register and resubmit information via the TRS.
HMRC strongly recommends that trustees familiarise themselves with the TRS system and obtain the information required to register in advance of the deadline in September.
How can George Hay help?
Our professional tax advisers can help you to determine whether your trust should be registered and support you to ensure registration is completed ahead of the deadline.
In addition, we can assist you with the identification of any tax liabilities and we can help you to ensure that you are fully compliant with new legislation, as it takes effect.
To talk to one of our experts, in Cambridgeshire, Hertfordshire or Bedfordshire, about the Trust Registration Service or other tax-related matters, contact us today.
