Trust Registration Service
This is an important update on the Trust Registration System (TRS), the HMRC are expanding the TRS so now, under the Fifth Money Laundering Directive (MLD5), trustees’ are obliged to provide information about nearly all Trusts and their Trustees.
The TRS were set up to meet the reporting requirements of the previous Money Laundering Directive (MLD4) and they did so by maintaining an ongoing register of trusts but not all trusts were required to register, only express trusts with a potential tax liability or an actual tax liability within certain criteria.
Now, virtually all Trusts must be registered, there are a few exceptions, namely;
Will Trusts that are wound up within 2 years of the Testator’s death
Charitable Trusts
Statutory Trusts (involving intestacy, bankruptcy etc.)
Pilot Trusts that are holding less than £100 and set up before 6th October 2020
Trusts of Insurance Policies under certain criteria
Pension Scheme Trusts holding assets of a Pension Scheme which is a registered Pension Scheme for the purposes of Part 4 of the Finance Act 2004 as these are already subject to regulation by either the Financial Conduct Authority or the Pensions Regulator.
Co-Ownership Trusts where the Trustees and the beneficiaries are the same people.
Trusts meeting Legislative requirements such as Bereaved Minors Trusts, 18-25 Trusts and Disabled Persons Trusts.
It is the legal responsibility of the Trustees to register a Trust or ensure that the Trust gets registered and that the registered information is kept updated. For this there needs to be a Lead Trustee nominated. An alternative is to get an agent to register the trust on behalf of the trustees, an agent needs to be registered with HMRC as an agent and have an agent services account.
The information required depends on whether or not the trust is a taxable relevant trust but certain elements of information are required for all trusts, for instance, the information about the trust set out in regulation 45(2)(a) and (5) of the Money Laundering Regulations 2017 including:
- The name of the trust
- Date of creation
- whether the trust has a business relationship in the UK
- whether the trust has acquired land or property since October 6th 2020
- whether the trust is listed on a European Economic Area (EEA) register
Also there is the requirement for the Trustees to be on the register with certain key details:
- Full name
- Date of Birth
- country of Nationality
- Country of Residence
- Mental Capacity
- NI number (lead Trustee only)
- Contact details (Lead Trustee only)
Then information about the Settlor is required:
- Full name
- Date of Birth
- Date of Death if the trust was set up after the settlor’s death
- Country of Nationality
- Country of residence
- Mental Capacity
- Business Name (if a business)
Beneficiary details required:
- Individuals – Full name, DOB, nationality, residence, mental capacity
- Classes – description of class (e.g. my children)
- Charities – Name of Charity, Country of residence
- Company/Employment Trusts – name of company, residence, description of beneficiaries
Finally, any individual having control of a trust – Full name, DOB, nationality, residence, mental capacity
Additional Information required for Taxable Relevant Trusts:
- Country of general administration of the trust
- details of liability to income tax and CGT
- information on the assets in the trust at time of registration
- NI number (for individuals)
- UTR (for organisations)
- Address (if NI number or UTI cannot be provided)
- Passport details if the address is not in the UK
There are some important deadlines that Trustees should be aware of – The Trust Registration is now open for non-taxable trust registration, you must register:
– Non-taxable Trusts in existence on or after 6 October 202 by 1 September 2022
– Non-taxable trusts created after 1 September 2022 within 90 days
– changes to the Trusts details or circumstances, within 90 of the change.
– Taxable relevant trusts set up before 6 April 2021 must register by 31 January (or 5 October) following the end of the Tax Year in which the trust had a liability to UK taxation
– Taxable trusts set up after 5 April 2021 and before 9 February 2022 must be registered by 1 September 2022
– Taxable Trusts set up after 9 February 2022 must be registered within 90 days of the Trustees becoming liable to pay UK taxes.
There will be penalties as well, there are 2 offences, failure to register in time and failure to update in time, both will be dealt with by a nudge letter, a timed reminder, but after that there will be a £100 fine.
