Chris Claxton-Shirley provides a reminder of the main requirements of registering trusts, including the exceptions which apply to certain clients.

What is the Trust Registration Service?

Chris Claxton-Shirley

As part of the implementation of the Fourth Money Laundering Directive 2017, HMRC’s Trust Registration Service (TRS) was first introduced in June of the same year to combat money laundering, serious crime and terrorist financing by making the ownership and control of trusts with tax liabilities more transparent.

Which trusts require registration?

Trusts with UK tax liabilities including inheritance tax, income tax, capital gains tax and stamp duty land tax are required to register. Since 6 October 2020, most non-taxable trusts have also been required to register. These include most UK express trusts, unless explicitly excluded by the legislation, and non-UK trusts with UK assets or UK-based trustees.

There are certain types of trust which do not need to be registered on TRS including (but not limited to):

  • trusts created by will but only if they are distributed within two years of the deceased’s death
  • bare trusts (where the trust is transparent for tax purposes and the beneficiary has outright ownership)
  • charitable trusts
  • trusts for life insurance policies paying out on death or critical illness
  • pension scheme trusts, and
  • co-ownership trusts (such as over a property where the legal owners are the same as the beneficial owners).

How is a trust registered?

A trust can be registered through the gov.uk website. An organisation government gateway user ID and password will be required.

You will need details of:

  • the name of the trust
  • the date of its creation
  • confirmation as to whether it is an express trust or not
  • the assets it holds, and
  • the identity of the lead trustee, settlor and any other individuals such as beneficiaries.

 You are required to give details of all known beneficiaries who can benefit from the trust.

For taxable trusts, you will need more information at the type of the trust, the settlor and details of other individuals.

Does TRS have to be kept up to date?

There is an obligation on the trustees to keep TRS updated and that any changes are notified within 90 days. The trustees should decide between them who will be the ‘lead trustee’ and responsible for communicating changes.

Failure to keep TRS updated (or register the trust) could result in a fine of up to £5k.

There are resources available to help practitioners with TRS including on the gov.uk website which contains most the information that is required.

HMRC also have an internal manual for TRS with technical, detailed guidance.