In this article, trust specialist, Gerry Surtees advises on what the TRS is and what you need to do to ensure your trust is registered.
The deadline for registration is 1st September 2022 for all ‘express trusts’ in existence on/after 6th October 2020, with new trusts created after this date, having 90 days to register.
What is the TRS?The UK Trust Registration Service (TRS) was created in 2017 to deal with a change in the law relating to anti-money laundering. The TRS provides a single online resource for the registering and updating of trusts. Up to now this has only concerned trusts that have a UK tax liability, but the rules are changing.
Which Trusts need to be registered?All express trusts are required to register with the TRS, unless they are exempt. Exempt trusts include:-
- UK-registered pension schemes
- Trusts used to hold certain life or retirement policies or insurance policy benefits
- UK charitable trusts
- Certain ‘pilot’ and ‘co-ownership’ trusts set up for specific purposes
- Most will trusts.
- Trusts for bereaved children under 18 or adults aged 18 to 25 set up on the death of a parent
- Financial’ or ‘commercial’ trusts created in the course of professional services or business transactions for holding client money or other assets
Does this include bare trusts?A ‘bare trust’ or ‘nominee’ arrangement is a particular type of ‘express trust’ that often gets created where one person, company or group of persons holds assets as the legal owner on behalf of another person, company or group of persons. This can include land and buildings held on behalf of a partnership or company, shares held on behalf of an employee or intellectual property such as trademarks held by individuals on behalf of a company.
These may not be obvious or formally documented, as up to now there have been no reporting requirements for such trusts, but from 1st September 2022 they will need to be registered. We would therefore encourage you to think about any arrangements of this kind you have in place, and speak to your advisers if you are unsure if any arrangement is in fact a bare trust – do not assume that your advisers will have full records of such arrangements.
Annual Declaration Once the trust is registered, HMRC will expect an annual declaration to confirm the details they hold are correct. In the event of changes to the trust in terms of beneficiaries or trustees, these changes will need to be registered with HMRC each time a change is made.
Late filing penaltiesHMRC reserve the right to issue a penalty if trusts fail to register or submit an annual declaration by the deadline set.
What should you do next?To determine whether your trust is exempt or whether it needs to be registered and avoid any possibility of a penalty for late filing, you should contact your advisers as soon as possible.
They will be best placed to advise you whether the trust does need to be registered, and may also be able to assist you in dealing with the registration, updating changes and submitting the annual declaration to HMRC.
If you would like more information on how we can help you and your business, please contact us at firstname.lastname@example.org or call 02476673160.
Please note: This article is provided for information only and was correct as at time of writing (07/03/22). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.