New HMRC Trust Registration Service (TRS)
New rules were introduced on 6 October 2020, that requires more UK trusts and some non-UK trusts to be registered on the TRS, regardless of whether the trust has any tax to pay, by 1st September 2022 but with some specific exclusions.
The main categories of trusts caught by the new requirements include:
1. UK express trusts, subject to exclusions (see below); and
2. Non-UK express trusts, which:
– Acquired land or property in the UK on or after 6 October 2020; or
– Have at least one UK resident trustee and enter a new business relationship with a UK ‘relevant person’ on or after 6 October 2020. This means that non-UK trusts with no UK resident trustees will not be required to register if their only link to the UK is through a business relationship with a UK based adviser.
An express trust is a trust deliberately created by a settlor, such as in the form of a deed or declaration of trust.
Which trusts are excluded from the TRS?
Trusts excluded from the requirement to register, include:
• Pension schemes
• Charitable trusts regulated in the UK
• Will trusts that are wound up within two years of death
• Policy trusts – providing that the policy only pays out on death, terminal or critical illness or permanent disablement
• Existing trusts with a value of less than £100 created prior to 6 October 2020
The full list of trusts not required to register can be found on GOV.UK.
How do you register a trust with the TRS?
Trustees or appointed agents are now able to register trusts under the new rules using the extended TRS online service which opened in September 2021.
The deadlines for registration under the new rules include:
• Non-taxable trusts in existence as at 6 October 2020 or created on or after 6 October 2020 and before 4 June 2022 – by 1 September 2022
• Non-taxable trusts created on or after 4 June 2022 – within 90 days of creation
• Non-taxable trusts created after September 2022 must be registered within 90 days
• Changes to the trust details or circumstances – within 90 days of the change.
What happens if you do not register a trust with the TRS?
If you do not register your trust or keep the details on the register up to date, HMRC will enforce penalties.
It’s proposed that these penalties are not as severe as the self-assessment penalty regime, and that ‘nudge letters’ will be sent for first offences with a proposed penalty of £100 for any subsequent offences.