Extension of the Trust Registration Service

The Trust Registration Service (TRS) was introduced in June 2017 as part of the UK’s Money Laundering regulations.

The TRS requires trustees to report information about the trust, trustees, trust assets (for taxable trusts), beneficiaries and other parties associated with the trust to HMRC.  This information will then need to be kept updated for any changes (except for changes to the trust assets).

Previously, only trusts which paid certain taxes in the UK had to register, and all of these trusts should already have been registered on the TRS and have submitted updates where necessary (within 90 days of any changes, or an annual confirmation by 31 January if there have been no changes).

The requirement for trusts to register has now been significantly extended to cover all express trusts, both UK trusts and foreign trusts with certain UK links, regardless of whether they pay tax in the UK or not. Broadly speaking, an express trust is one created deliberately, either in someone’s lifetime or on their death. This extension mainly affects dormant and inactive trusts.

The deadline for registering these non-taxpaying trusts is on 1 September 2022 (or within 90 days of the creation for trusts created on or after 1 June 2022).

There are some exclusions from registration, but broadly most trusts with UK connections – including some non-exempt bare trust arrangements – will need to register on the TRS by 1 September 2022.

Trustees of UK trusts, or non-UK trusts with UK links, should ensure that they check the new rules and register if they are required to under the new rules.

Penalties will be charged for late registration of non-taxable trusts, although not immediately.  Once the 1 September 2022 deadline has passed, HMRC will write to trustees who haven’t registered and ask them to correct this.

Where a trust does not hold any cash and cannot pay, the responsibility for penalties may fall on the trustees or the settlor.

If you would like our help, or if you want to find out more information about the trusts which need to register and those which are currently exempt from registration, please contact your usual AAB Private Client team member or call 01224 625 111.