Trustees, here is what you need to know about the Trust Registration Service deadline

Someone holding glasses up to a HMRC letter.

Being a trustee comes with many responsibilities, and, in some cases, you will need to register a trust with the Trust Registration Service (TRS) by 1 September 2022 or you could incur a fine.

A trust is an arrangement that lets someone, known as the settlor, set money or assets aside for someone else, known as a beneficiary. A trust is managed by a trustee for the benefit of one or more beneficiaries. The settlor may set out how they want the assets in the trust to be used.

There are many reasons why you may set up a trust, from passing on assets to children to generational wealth planning.

As a trustee, you are responsible for managing the assets in a trust and the decisions you make must be done in the best interests of the beneficiary.

Read on to find out if registering a trust you manage is something you need to do.

What is the Trust Registration Service?

The TRS was set up in 2017 as part of an anti-money laundering directive. New rules were introduced in 2020 that require more UK trusts and some non-UK trusts to be registered with HMRC before the September deadline.

Trusts set up after the deadline will have 90 days to register with the TRS.

If you don’t register with the TRS, HMRC will send “nudge letters” and there is a proposed £100 fine for any subsequent offences. If trustees deliberately ignore the requirements, higher penalties could be imposed.

Do you need to register the trust you’re responsible for?

So, which trusts need to be registered before the deadline? All UK express trusts, whether or not they pay tax, must be registered unless they are on the exclusion list.

An “express trust” refers to a trust that was created by a settlor, including those set up in a will, rather than those that were created through a court decision or the operation of the law. Most trusts are express trusts.

If a non-UK trust becomes liable for tax on income coming from the UK or on UK assets, it will also need to be registered with the TRS.

Some trusts do not need to be registered with the TRS even if they are express trusts. The exclusion list includes:

  • Pension schemes
  • Charitable trusts
  • Will trusts that are wound up within two years of death
  • Policy trusts that hold financial protection that pays out on death or critical illness.

Registering a trust with HMRC

If you’re a trustee for a trust, you are responsible for registering it with TRS. If there are multiple trustees, you must nominate a “lead trustee” who will be the main point of contact for HMRC.

You can register using the Government Gateway and create an organisation ID.

You can use the gateway to make changes to your registered trust in the future and provide an agent with the authority to make changes too.

You will need to provide information that you can find on the trust deeds and letters you may have received from HMRC, including:

  • The name of the trust
  • The date the trust was created
  • Details about any UK land or property the trust has purchased.

In addition, you’ll also need to provide details for the lead trustee, the settlor, and other individuals or organisations that are involved in the trust, such as beneficiaries.

Information about what’s held in the trust, from cash and shares to material assets, will also need to be provided.

Once a trust is registered, you will receive a PDF copy of a report to show proof of registration that you should keep in a safe place.

If the trust is taxable, you must declare the register is up to date each year by 31 January.

Do you need help managing a trust?

As a trustee, sometimes your role and responsibilities may seem overwhelming.

If you’re a trustee, it’s important to keep up to date with changes and have confidence in the financial decisions you make. We’re here to offer you support.

Whether you have questions about registering a trust with the TRS, want to understand how you can make the most out of assets held in a trust, or even discuss setting up a trust yourself, we can help. Please contact us to arrange a meeting.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning.