Changes in trust registration requirements – act now!

Did you know that you have until September 1st 2022 to register a trust with the Government’s Trust registration Service (TRS), even if you previously didn’t have to?

Until recently, only thrusts that had a UK tax liability, had to register. This included off-shore trusts, but where they still had a UK tax liability. Now, all Express Trusts need to be registered.

Recent changes in Trust Registration Requirements

The new requirements to register a trust were introduced in 2020. Those trusts created on or before October 6 2020, have until September 1 2022 to register or be faced with a fixed penalty fine of £100 or up to 5% of any tax due (or £300, whichever is greater).

Trusts created after this date must be registered within 90 days of creation.

It is estimated that because of this change, there may be around one million trusts in the UK that are still to be registered before the September 1st deadline.

What trusts now need to be registered?

The Government instructs that the the following types of trust now need to register:

  • All UK express trusts — unless they are specifically excluded
  • Non-UK express trusts, like trusts that:
    • acquire land or property in the UK
    • have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK

By way of example, trusts that now require registration include those where:

1. A trust holds an offshore or onshore investment that was set up by a financial advisor. Most commonly these include:

  • discounted gift trusts
  • loan trusts
  • gift and loan trusts

2. Property is held and a beneficiary exists but where there was no taxable income or capital gains and therefore no need, up to now, to register with HMRC.

3. Trusts that hold shares in a private company. This includes:

  • a trading company,
  • a family investment company (FIC)
  • a personal investment company (PIC)

4. Any other trusts that hold other assets where a tax liability has not arisen.

Trusts that do not have to be registered.

While the extension of the TRS requirements covers many trusts that previously didn’t have to register, there are a number that remain exempt. A full list of exemptions can be found on the Government’s ‘register a trust page’ here.  Remember, that this only applies if the trust is not liable to UK taxes.

How TaxAgility can help

While you can do this yourself through your own Government Gateway account, it’s really important that you get it right the first time. Mistakes in any reporting to HMRC can be very costly. This is why TaxAgility offers a simple service to ensure your Trust is reported correctly. First, we will make sure your trust isn’t exempt. Then we will ensure the correct information is reported through the TPS service and that it is up to date – another requirement, even if you have previously registered your trust.

Contact TaxAgility today on 020 8108 0090 and enlist our assistance in registering your Trust – time is running out.