The Trust Registration Service (“TRS”) was originally set up in 2017 and only required trustees of express trusts with a relevant tax liability to register.
The relevant taxes are:
- Income tax
- Capital Gains Tax
- Inheritance tax
- Stamp Duty Land Tax
- Stamp Duty Reserve Tax or Stamp Duty
Since 2017, trustees have had an ongoing obligation to keep the register up to date for any years when the trust incurred a tax liability. They have had to state any changes made to the trust such as a change in trustees. If there were no changes then the trustees only had to confirm the TRS was up to date.
In 2020 the TRS went digital allowing trustees to maintain the trust details online or to authorise their agent to do this on their behalf.
What is changing?
The Fifth Anti-Money Laundering Directive introduced new rules which extend to the scope of the trusts that need to be registered with the TRS.
This means that more or less every existing or newly-created UK trust, non-UK trust that has a UK trustee resident or trust property and specifically excluded trusts which have a tax liability, will now need to be registered. As before the obligation to complete this registration falls to the trustees.
Trust that don’t need to register
There are some exceptions. These trusts will not need to register with the TRS:
- Trusts used to hold money or assets of a UK registered pension scheme, such as an occupational pension scheme
- Trusts are used to hold a life insurance policy, income protection policy, or retirement benefits if the policy only pays out on death, terminal illness or permanent disablement, or to meet the healthcare costs of the person assured and does not have a surrender value
- Trusts holding insurance policy benefits providing the benefits are paid out within 2 years of the death of the person assured
- Charitable trusts which are registered as a charity in the UK or which are not required to register as a charity (for example, schools, museums, galleries, churches and certain groups)
- ‘Pilot’ trusts which were set up before 6 October 2020 for future use and which hold no more than £100
- Co-ownership trusts are set up to hold shares of property or other assets which are jointly owned by two or more people for themselves as ‘tenants in common’
- Will trusts which are created by a person’s will and come into effect on their death providing they only hold the estate assets for up to two years after the person’s death
- Trusts for bereaved children under 18 or adults aged 18-25 set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme
- ‘Financial’ or ‘commercial’ trusts created in the course of professional services or business transactions for holding client money or other assets
What information does the TRS need?
The exact information that the trustees will need to input will depend on whether or not the trust is tax-bearing. However, the essential information is as follows:
- Details of the Settlor, Trustees and Beneficiaries
- Information about how the trust was created
- Information about what is in the trust at the time of registration
Trustees will have until 10 March 2022 to register already existing trusts. New trusts will have 30 days from the date the trust is established to register with TRS. Any changes to the trust, such as changes to the trustees or beneficiaries, will also have a 30-day deadline.
How we can help
These changes can seem daunting, and it can be difficult to navigate what needs to be done. If you would like advice on the registration process or with your trust administration, Roythornes Private Client team would be pleased to help.