The deadline for registering trusts on the new Trust Registration Service (TRS) of 1st September 2022 is fast approaching and now under 2 months away.
As a reminder, the new rules, which were introduced on 6 October 2020, extended the scope of the TRS to UK (and some non-UK) trusts, regardless of whether or not the trustees have become liable to pay any tax. Following this, many trusts that are not liable to tax, nor expected to be in the future, have been caught under the new rules and must register.
In terms of registering the trust, there are two possible options to achieve this:
- The trustees can authorise an ‘agent’ to register the trust on their behalf – but, as per HMRC guidance, it’s only possible to register as an agent if the business operates as an accountancy service provider, or;
- The trustees can register the trust themselves, with one trustee designated as the ‘lead trustee’ for HMRC correspondence
It should be borne in mind that the registration process is relatively straightforward, particularly for non-taxable trusts, and the trustees may wish to consider carrying out the registration themselves, potentially with some support from their financial adviser, rather than pay a third party. Following registration, the trustees need to be aware of their ongoing requirements.
If the trust is liable to tax for any tax year, you must declare on the trust register that the details of the persons associated with the trust are accurate and up to date. You must do this whether there have been any changes or not.
If the trust is liable to Income Tax or Capital Gains Tax, you’ll also need to confirm on the trust’s Self Assessment return SA900 that you’ve either:
- updated the details on the trust register
- confirmed that there have been no changes to the trust on the trust register
If the trust is not liable to tax, HMRC do not need an annual declaration.
Once registered, third parties who deal with the trust, such as a financial planning firms like Eldon, will need to see proof of registration, as part of the standard money laundering and ID checks that take place. A downloadable PDF can be obtained through the TRS as evidence.