Extension to the Trust Registration Service

The government scheme for registering trusts is changing and it’s important that trustees address their new responsibilities. NICK GILES, tax consultant at chartered accountants and chartered tax advisors Page Kirk, provides an overview.

The Trust Registration Service (TRS) was introduced by HMRC in 2017 to enable trustees and personal representatives to comply with their obligations under the Fourth Money Laundering Directive (4MLD).

Under 4MLD, a trust was obliged to be registered on the TRS when it incurred any form of UK tax liability, which would include a liability to income tax, capital gains tax, inheritance tax or stamp duty land tax.

The registration process required trustees to give HMRC personal details of all individuals associated with the trust, including the person who created it (the settlor), the people who manage it (the trustees) and any individual who can receive a benefit from it (the beneficiaries). The registration process also required some details on the legal status of the trust and the assets that were used to create it.

The implementation of the TRS was repeatedly delayed but eventually the final deadline for registering was 5 March 2018. After this date, it was intended that trustees would be able to access the TRS to ensure the details held were correct and update the register for any changes that occurred post-registration but that facility never materialised under the old 4MLD system.

The introduction of the Fifth Money Laundering Directive (5MLD) on 6 October 2020 has now extended the scope of the entities that are required to register on the TRS and increased the compliance requirements of trusts that are already registered.

Save for a few detailed exceptions, it is now a requirement for all trusts to be registered on the TRS. There will be many trusts that, up until this point, have not been required to register and they will now need to review their obligations. These may include trusts that were set up with minimal assets but which have remained reasonably dormant, trusts set up to own property for beneficiaries to live in that do not generate any income, trusts whose only income is minimal savings income covered by HMRC’s concession that allows a tax liability of £100 or less to be disregarded and interest in possession trusts who mandate the trust income directly.

An unfortunate timing issue also means that if a trust was in existence on 1 October 2020, and has subsequently been closed down, it must be registered and then closed down on the TRS.

Registrations for non-taxable trusts opened on 1 September 2021 and all trusts with an obligation to register must be registered by 1 September 2022.

For trusts that have already registered on the TRS, 5MLD will now require trustees to “claim” the trust on the register and review the details held to ensure they are correct. Any changes must be updated on the TRS within 90 days of the change taking place and the trustees must confirm annually that the trust’s details are correct. The annual deadline is 31 January, in line with the selfassessment tax return deadline, and the process is carried out by confirming the details on the TRS itself and then by ticking a box on the trust tax return confirming that the details have been checked and confirmed on the TRS.

As with all developments in tax and HMRC policy, the early implementation stage and ongoing compliance are likely to present some challenges to individuals. Page Kirk have extensive experience in dealing with trusts and estates and would be happy to discuss any concerns you may have and provide expert assistance in meeting your compliance obligations. To arrange a conversation please email enquiries@pagekirk.co.uk or call 0115 955 5500.