HMRC Trust Registration Service

HMRC Trust Registration Service

What is the Trust Registration Service (TRS)?

The Fifth Money Laundering Directive (5MLD) which came into force on 6 October 2020 stipulated that all trustees and personal representatives of estates must comply to a new online Trust Registration Service (TRS), as a single route to trust registrations. This online TRS submission replaces the previously used paper 41G (Trust) form.

With a registration deadline looming, can the Trust Registration Service (TRS), impact you?

Trustees who are required to register trusts under the Trust Registration Service have until 1 September 2022 to register. With the registration deadline fast approaching, are all trustees aware of the new registration requirements?”

Part of a European initiative to tackle money laundering and the financing of terrorism, has seen significant changes to the rules around the TRS, extending the scope for TRS for many more trusts and trustees than originally anticipated. This means trustees who were previously able to disregard the requirements to register with the TRS must now reassess their position.

Initially, the requirement was for all express trusts with a UK tax liability to register with the TRS. According to HMRC, an ‘express trust’, is a trust deliberately created by a settlor, usually in the form of a document such as a written deed or declaration of trust, rather than, for example, one created by an act of law.

The HMRC requirement now however, is for all UK express trusts to register, whether they are liable for tax or not. The only opt-out is if they fall within specific exclusions. Exclusions cover express trusts considered lower risk by HMRC, such as charitable trusts. Even trusts in such excluded categories, however, must register if they have a liability to UK tax. There are also provisions for non-UK trusts: if this is of relevance to you, we can advise further.

Please also bear in mind, trusts in existence on 6 October 2020, but which have since been wound up, also remain within scope. Such trusts must register and then be removed from the register.

We recommend that you reassess your trust obligations now. Is it possible that you have been involved in setting up a trust, or acting as a trustee in the past? What constitutes a trust is not always intuitive. Some arrangements may not immediately spring to mind as being in the trust category, such as opening a cash deposit account for a minor. In fact, this could constitute a bare trust: although the good news is that this is one of the TRS exclusions. Investments such as stocks and shares held on trust for the benefit of a minor, on the other hand, are not excluded. For the avoidance of doubt, the rules do not apply to Child Trust Funds, nor Junior ISAs.

The deadline to register non-taxable trusts created on or before 6 October 2020 is 1 September 2022. Non-taxable trusts created after 6 October 2020 must be registered within 90 days of their creation or becoming liable for tax, or by 1 September 2022 (whichever is later). Penalties may be levied for late registration.

Get in touch

Rayner Essex has experience of helping clients navigate through the TRS online service and can assist you with the process. Our experts can assess your trust obligations, ensuring that you comply with the HMRC requirements avoiding any unnecessary penalties. Please do not hesitate to contact us if you have any queries regarding the registration process or you would like us to register a trust on your behalf.

For further information or for help with your trust queries contact our Executive Manager, Marina Trinchese today.

Sign up to our newsletter

Join our mailing list to receive regular updates on
the news and events you need to know about.