Trust Registration Service
A guide for trustees of UK express trusts
Background
• As part of complying with anti-money laundering legislation the types of trusts which need to be registered with HMRC has been extended beyond just those with a tax liability to include many types of ‘express trusts’.
• This new requirement affects both express trusts that are already in existence and any new express trusts which are created.
• Express trusts need to be registered using HMRC’s online Trust Registration Service (TRS) with a deadline of 1st September 2022 for existing trusts and within 90 days of being created for new trusts.
• Trusts need to be registered by the lead trustee although they can appoint an agent to do this.
What is an express trust?
An express trust is one that is intentionally created by a settlor (the person who creates the trust), usually as a written deed or a declaration of trust. This provides express instructions as to how the assets, described in the trust document, are to be held for the benefit of the beneficiaries (the person or persons who will benefit from acquiring the assets).
Most trusts are express trusts, although there are several exemptions.
What types of express trust need to be registered?
• All UK express trusts must be registered unless they are exempt (see below).
• Non-UK trusts must also be registered if they have one or more UK trustees, acquire land or property in the UK or enter a business relationship in the UK.
In most cases, express trusts which hold an investment bond will need to be registered. However, where a life assurance policy is held in trust, this will normally be exempt – see below for more detail on exemptions.
Exemptions from the registration requirements
There are several exemptions from the requirement to register express trusts, some of the key ones are covered below.
Details on all the types of exempt trusts can be found at:
• A trust used to hold a life assurance policy which only pays out on death, terminal or critical illness, permanent disablement, or to meet the healthcare costs of the person covered. It is worth noting that HMRC do not consider funeral plans exempt from registration as a funeral plan is not a life insurance policy.
• A trust that holds insurance policy benefits received after the death of the person assured, as long as the benefits are paid out from the trust within 2 years of the death.
• A charitable trust that is registered as a charity in the UK or is exempt from the need to be registered as a charity.
• A ‘pilot’ trust set up before 6 October 2020 that holds assets worth no more than £100 (pilot trusts set up on or after 6 October 2020 will need to register).
• A co-ownership trust set up to hold shares of property or other assets jointly owned by two or more people for themselves as ‘tenants in common’.
• A will trust created by a person’s will which comes into effect on their death, providing the deceased persons estate assets are only held in the trust for up to two years after their death.
• A trust for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme.
• A trust used to hold money or assets of a UK registered pension scheme — like an occupational pension scheme.
Information required by HMRC Trust Registration Service
The key information required to register a trust on the Trust Registration Service website is:
• The name of the trust and the date the trust was created.
• Whether the trust is an express (non-taxable) trust or taxable trust.
• The Settlor's full name, date of birth, date of death (if applicable), nationality, country of residence.
• The Trustee(s) full names, dates of birth, nationality, country of residence and, for the lead trustee their National Insurance number, address, email address and phone number. If the lead trustee is an organisation, the organisation name must be supplied.
• For absolute or bare trusts, the beneficiaries full name, date of birth, nationality, country of residence.
• For discretionary trusts, a description of the class of beneficiaries (taken from the trust deed) including persons specially named in a discretionary trust.
• The mental capacity of any settlor, trustees, or beneficiaries, is assumed to exist unless there is proof supplied to HMRC to evidence where this is not the case.
Who can register a trust?
It is the trustee’s responsibility to identify whether a trust needs to be registered through the Trust Registration Service website and if so, to ensure this is completed within the deadlines for existing or new trusts.
All trustees named on a trust are equally legally responsible for the trust, but a ‘lead’ trustee must be nominated to be the main point of contact with HMRC.
Whilst a trustee can register the trust, they can also appoint an agent to act on their behalf as long as the agent is based in the UK and is registered with HMRC as an agent or other appropriate supervisory authority for anti-money laundering requirements.
How to register a trust
Before you can register a trust as a trustee, you need to have an Organisation Government Gateway user ID and password (this is different to a personal Government Gateway ID which you may have, for instance for filing a tax return online). If you do not have one, you can create one the first time you register.
You’ll need a government gateway user ID for each trust you want to register which is created at the time you register.
There is no file and save option so you need to have all information ready, you cannot close and return without having to start again.
You need to keep a note of all email addresses, passwords and unique reference numbers related to each individual trust registered.
Registration deadlines
• The deadline for registering a non-taxable express trust is 1 September 2022.
• For new non-taxable express trusts created after 1 September 2022, registration must be within 90 days.
• Any changes to the trust details must be updated within 90 days.
HMRC may apply penalties to the trustee(s) where they fail to register a trust or update details of a trust.
• Up to three months after deadline: £100.
• Three to six months after deadline: £200.
• More than six months after deadline: £300 or 5% of the total tax liability in the relevant year (whichever is higher).
To register a trust go to https://www.gov.uk/guidance/register-a-trust-as-a-trustee
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