Trust Registration Service – do the new rules apply to you?
11th July 2022 by Kate Mansfield
It has been necessary to register all UK and non-UK trusts where they are liable to pay mainstream UK tax (income tax, capital gains tax, inheritance tax) with HMRC’s Trust Registration Service (TRS) since 2017.
This has now been extended to cover more UK and non-UK trusts that don’t have to pay tax. This has been done amid growing concern that trusts could be used for money laundering or terrorist financing.
The deadline for registering such trusts is 1 September 2022.
In addition to those trusts paying mainstream UK tax, the following types of trusts (unless falling within one of the exclusions) will need to be registered.
- All UK express trusts whenever established, provided they are in existence on or after 6 October 2020;
- Non-UK express trusts that acquire an interest in land in the UK on or after 6 October 2020; and
- Non-UK express trusts that have at least one trustee resident in the UK and which enter into a business relationship on or after 6 October 2020 with a relevant person in the UK (which will include solicitors, banks, accountants)
An express trust is not defined in the regulations but HMRC have advised that it is one that has been created by an individual(s) such as a Will, a deed or a declaration of trust.
It does not include a trust that arises by operation of law so will not include implied, resulting or constructive trusts; trusts arising on an intestacy; and trusts that arise as a result of a court order eg on divorce.
The new rules mean that a number of different types of trust will now need to register even though no tax may be due in relation to them.
Below is a list of some of the common additional types of trust that will now need to be registered. Please note this is not an exhaustive list and there are some exclusions so advice from a professional should be sought.
Bare Trusts and nominee arrangements
There are limited exclusions eg where the asset concerned is a bank account for a minor but most other such arrangements will need to be registered.
Life interest trusts
These will usually be created by a Will and would include a right to live in a property for example (unless fully wound up within 2 years of death).
Pilot Trusts
These are commonly established to hold money at some point in the future, eg pensions, death in service benefits, assets under a Will.
Such trusts need to be registered if the total value is in excess of £100; it was set up on or after 6 October 2020; or it was set up to receive death benefits under a pension policy or under a Will. This does not apply to pensions that are held under a company’s master trust which pay out on death. For life insurance policies held under trust these will only need to be registered if the money hasn’t been paid out and the trust wound up within 2 years of death.
Trusts for disabled person(s) and trusts for bereaved minors (under 18) or adult children aged 18-25 will not have to be registered.
Trust Registration Deadline
Previously non-taxable trusts that came into existence before 4 June 2022 will need to be registered by 1 September 2022. Those created on or after 4 June 2022 will need to register within 90 days of creation.
The Trust register must also be kept up to date for example any changes to trustees must be updated within 90 days of the change.
If you have any questions please contact a member of Laceys Private Client Team on 01202 377984.
Kate Mansfield
Partner — Private Client
Direct dial: 01202 377853
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“We have had the pleasure of Kate’s sensitive and unwavering professional support for a number of years. She has always been able to combine her deep expertise, with practical context and a tone of voice that gently escorts you through, often difficult decisions. We could not recommend Kate highly enough, both professionally and personally.”
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“Kate was extremely knowledgeable, straightforward to deal with as well as sympathetic during what was a difficult time. I felt in good hands!”
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“We were treated with respect and felt our wishes were taken in consideration. The patience shown in helping us understand the implications of decisions was outstanding.”
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“Very efficient and welcoming. Understood my access requirements and my unique concerns thoroughly.”
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“Mrs Mansfield has been exemplary in every respect. She is an excellent listener and has the ability to explain complex issues patiently and emphatically. We are fortunate in having her as our legal adviser.”
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“Professional, always available for a phone enquiry. Always informed me as thing's progressed. Excellent company with very pleasant and helpful front of house. My sincere thanks.”
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“Kate took the trouble to understand the particularities affecting my Will and found sensible ways of dealing with them.”
Kate is a Partner in our Private Client Team and has 25 years’ experience in private client work, specialising in wills, tax planning and estate administration. Kate has worked in this area since she qualified and has assisted thousands of families and individuals.
Kate qualified as a solicitor in 1995 after obtaining a 2.1 in Law from the University of Kent. She completed her training contract with Laceys and became a partner in 2002.
Kate is a full member of the Society of Estate and Trust Practitioners (STEP) and sat on the STEP committee for 6 years. She has also taught on the Legal Executives course at Bournemouth & Poole College.
Kate enjoys the personal side of the work and the satisfaction of assisting the bereaved and families with complex affairs, whether it be complex financial aspects or those where a diplomatic hand is required. She prides herself on being able to explain the legal position in plain English.
Out of the office she enjoys keeping fit. She enjoys going to the gym and getting out into the Dorset countryside on her road bike. Cooking, particularly baking, is also a passion.
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