HM Revenue and Customs (HMRC) first introduced the Trust Registration Service in June 2017 in response to the UK government’s obligations under the Fourth Money Laundering Directive (4MLD). This was originally brought in to help combat money laundering and to aid tax transparency.
The 4MLD required that all express trusts (i.e., where a trust was deliberately created by a settlor in writing) with a tax liability in a given tax year needed to register on the TRS. The information to provide on the TRS includes settlor, trustees and beneficiary details and assets of the trust. The taxes covered are:
HMRC set a deadline for all existing ‘taxable’ trusts (for example those already registered for Self Assessment completing annual trust tax returns) to register on the TRS and that deadline has since passed. It is therefore important to register now if you, as a trustee, have not done so already.
For trusts not registered for Self Assessment, the deadline for registering will depend on the circumstances involved:
For those trusts that complete annual tax returns, the trustee, or their agent, will need to keep the Trust Register up to date (with changes of trustees, addresses, beneficiaries etc.) and confirm online to HMRC that this has been done, or confirm that no changes have arisen during the tax year.
The Fifth Money Laundering Directive (5MLD) has since been implemented and new rules introduced from 6 October 2020 extend the scope of the trust register to all UK and some non-UK trusts that are currently open, i.e., removes the need for the trust to be ‘taxable’. As a result, this brings many non-taxable express trusts into the scope of needing to register on the TRS.
The deadline for registering these trusts via the TRS is 1 September 2022.
The good news is that certain trusts do not need to register unless they are liable to pay UK tax. These include:
Trusts which are not set up deliberately by a settlor but are imposed by Courts or created by legislation, are not ‘express trusts’ and therefore do not have to register unless they are liable to tax. Examples of such trusts include a trust:
If you have any form of trust structure and need assistance to understand if the trust needs to register under the TRS rules then please contact us. Due to the complexity of the rules, we can give confirmation of the correct position and assist with registering the trust on your behalf if required.