Following the adoption of the 4th Anti-Money Laundering Directive, HMRC introduced the Trust Regulation Service (TRS) to improve transparency surrounding the beneficial ownership of assets held in trusts.
Since then, on 6th October 2020, new rules have been introduced under the 5th Money Laundering Directive, extending the scope of the trust register. This extension means that both UK and non-UK trusts (with some exceptions) are required to register regardless of whether the trust is liable to pay any tax.
The registration deadline for trusts with a UK tax liability is 1st September 2022. For trusts that have acquired UK land on or after 6th October 2020, that new registration date also applies.
Which trusts need to be registered?
HMRC have given an overview as to which trusts the TRS is relevant to, including:
- All UK express trusts
- Some non-UK express trusts. This is dependent on a variety of factors; for example, if a trust has no UK trustees but owns land or property in the UK or trusts with at least one UK trustee which acquires UK property or enters into a business relationship with a relevant UK person, e.g., a financial advisor
- Excluded express and non-express trusts where they have a tax liability. In this case, they must be registered to receive their Self-Assessment Unique Taxpayer Reference (UTR) – required to fill out self-assessment tax returns.
Are there exceptions?
Some trusts will not be affected by the new rules.
- UK regulated charitable trusts
- Pension trusts already registered with HMRC as a pension scheme
- Co-ownership trusts set up to hold shares of joint assets and property.
HMRC has confirmed these exceptions and therefore they do not need to be registered.
Do I need to keep records?
You should always keep records of your trust. HMRC requires you, as a trustee, to maintain accurate and up-to-date records of the trust’s actual and potential beneficial owners (shareholders).
There are some sets of information that must be included in the records. They include:
- Full name of the trust
- Creation date of the trust
- Country of residence of the trust (for tax purposes)
- Place where the trust is administered
- Contact address for trustees
- Details of settlors and beneficiaries
Wills and Trusts Solicitors
Protecting your trusts is essential as failure to do so could result in harsh penalties being imposed by HMRC. At Larcomes Legal Limited, our team of experienced Private Client Solicitors would be happy to assist you with protecting your Will and trusts.
Get in touch with our team today. Call 023 9244 8100 (Portsmouth) or 023 9224 6666 (Waterlooville). Alternatively, fill in this enquiry form.
Please note that this article is not intended as legal or professional advice. This is a general news article only and updates to the law may have changed since it was published.