The new Trust Registration Service (TRS) came into force from September 1st 2022, with a view to assisting with the implementation of anti-money laundering legislation. Trustees could face HMRC penalties if they fail to register their trust on the TRS, as it is now a legal requirement.
Our experts here at Ison Harrison can help with the Trust Registration Service for a fee of £275 + VAT.
What is the Trust Registration Service (TRS)?
Trustees of trusts should already be aware that they needed to register their trusts on the TRS before September 1st 2022. The TRS is an online service which registers the information relating to the trust with HMRC.
Once this has been done the trust is allocated a unique taxpayer reference (UTR) if there are tax liabilities, much like with self-assessment if you are self-employed. These tax liabilities can include Income Tax, Capital Gains Tax, Inheritance Tax, Stamp Duty Land Tax, Stamp Duty Reserve Tax, Land Transaction Tax (Wales) and Land and Buildings Transaction Tax (Scotland). If there are no tax liabilities the trust is allocated a unique reference number.
The implementation of new legislation, the Fifth Anti-Money Laundering Directive (5AMLD), has led to this widening of the scope of the TRS, whereby now it is a legal requirement to register all UK and some non-UK trusts, regardless of their tax liability status. Previously it was only a requirement to register those trusts with tax liabilities.
Which trusts need to register on the TRS?
- All UK express trusts including co-owned properties where land registry title details differ from those people entitled to the proceeds of the sale.
- Where UK land is held in a non-UK express trust, and the trust has trustees who are resident in the UK, enter a business relationship with the UK and are liable for UK tax.
- Any trust that has tax liabilities and therefore requires a UTR. This includes trusts held in the estates of deceased people.
Which trusts are exempt from being registered on the TRS?
- Where a trust holds the assets of a UK-registered pension scheme.
- Where a trust holds the funds from life or retirement policies and these only pay out on death, serious illness or when covering medical expenses.
- Where a trust holds the funds from an insurance policy received after the insurer’s death, and the funds were paid out of the trust within two years of the death.
- Where a trust is a charitable trust for a UK-registered charity.
- Where the trust is a pilot trust set up before 6th October 2020 and holds no more than £100 in it.
- Where the trust is a co-ownership trust where the property is held by the people named on the Land Registry title as tenants in common for themselves.
- Where the trust is a will trust which comes into effect on death and only holds estate assets for up to two years from the death.
- Where the trust is an 18-25 trust set-up by will, intestacy or the criminal justice compensation scheme or is a trust for bereaved minors.
- Where the trust is a financial or commercial trust which has been created to hold client money or assets in the course of business.
- Where the trust works in accordance with section 89 Inheritance Tax Act 1984, whereby it is bank accounts for minors or persons lacking mental capacity, or a disabled beneficiary trust.
How Ison Harrison can help you register on the TRS
There is a significant amount of administration involved in registering a trust on the TRS, and our wills and probate experts can assist in understanding, completing and maintaining this record.
Trustees needed to register their trust on the TRS before 1st September 2022, and if the trust was in existence on 6th October 2020 but has since closed, it still needs to be registered on the TRS and once on there the trust can be officially closed.
To register on the TRS, trustees need to declare the following information for all trustees and beneficiaries:
- dates of birth
- national insurance numbers (UK citizens)
- passport details (non-UK citizens)
- telephone numbers
- countries of residence and nationality
- mental capacity at the time of registration (for trustees)
Any changes to this information also needs to be logged on the TRS within 90 days. Also, any changes to the tax status of the trust needs to be recorded. The trustee must also declare the tax status of the trust on an annual basis on 31st January each year.
For a fee of £275 + VAT, Ison Harrison can complete the registration of your trust on the TRS via a Government website and help you understand what is involved in maintaining the records.
Get in touch with our Wills & Probate team for further information and find out how we can assist you with this new requirement.