Trust Registration Service

Aug 9, 2022 | Tax Tuesday, Taxation

The Trust Registration Service (TRS) is part of the UK government’s anti-money laundering (AML) and counter terrorist financing efforts.

The TRS itself was introduced in 2017 and so has been around for several years now. However, the scope of the reporting required has recently been increased.

What is a trust?

For the purposes of the TRS, a trust is an entity where a person (the settlor) passes legal ownership of assets to others (the trustees), giving instructions and guidance as to how those assets are to be managed and details of who should benefit from them (the beneficiaries).

Before the latest changes, the only trusts which needed to register were broadly those with a UK tax liability.

Such trusts were normally obliged to register by 31 January following the end of the tax year in which the trust had a UK tax liability.

The latest changes mean that non-taxable trusts which existed on 6 October 2020 or later need to register under the TRS by 1 September 2022.

Any new trusts which come into being after 1 September 2022 must register within 90 days.

Non-UK trusts with UK assets or UK income which have UK tax liabilities continue to be obliged to register as well as those which:

  1. acquire land in the UK, or
  2. have at least one UK resident trustee and enter into a business relationship with a UK service provider subject to the AML rules.

Are there any exclusions?

Certain trusts which already report sufficient information due to other existing reporting requirements, and those where the risk of them being used for money laundering or terrorist financing is deemed low, are excluded from the rules.

These include bank accounts held for minors, charitable trusts which are registered UK charities, registered pension schemes, certain will trusts and certain trusts created by the general operation of law.

What needs to be reported?

The information to be reported under the TRS can vary but typically includes information on the settlor, beneficiaries and trustees as well as details of trust assets, tax liabilities and certain other related information.

Registration: How can we help?

A lead trustee will be appointed by the trustees to be the main point of contact for HMRC and can go through the online registration process themselves.

Alternatively, here at Harold Sharp, we can take care of the registration process for the trustees.  Once registration has occurred, the trustees will need to claim the trust and are responsible for making any relevant ongoing changes to the details held by HMRC (see further guidance).

What happens if the deadline is missed?

HMRC have confirmed that initially there will be a soft landing and that a pragmatic approach will be taken to late registrations. How long HMRC’s goodwill on this matter will remain is debatable and our advice is to ensure trustees meet the deadline.

Questions about trust registration? Contact your usual relationship principal, email or call 0161 905 1616.

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