Changes made to Trust Registration Service as deadline looms

HM Revenue & Customs (HMRC) has implemented legislative changes to its Trust Registration Service (TRS).

The scope of the TRS has been extended to cover almost all UK express trusts and some non-UK express trusts established on or before 6 October 2020.

The UK TRS came into effect following implementation of the EU’s Fourth Money Laundering Directive. The directive aims to improve transparency around the beneficial ownership of assets held in trusts with UK tax liabilities.

The Fifth Money Laundering Directive, implemented on 6 October 2020, extends the scope of the TRS with limited exclusions and covers certain non-UK trusts, but all UK express trusts. Brexit has not affected the obligation to comply, as the Directive was transposed into UK law.

Commenting on these developments, Axiom DWFM partner, Harry Pattihis, said: “This briefing note is an important update on Trusts and in respect of which professional trustees and corporate service providers ought to be aware of the deadlines.”

From 6 October 2020, the following trusts must be registered with HMRC’s TRS:

• All UK express trusts (unless specifically excluded);
• Any non-UK trusts (which is an express trust):

            a.       and which has assets in the UK receiving income or has assets in the UK on which it is liable to pay the following taxes:

                      i.      Income Tax

                      ii.      Capital Gains Tax

                     iii.      Inheritance Tax

                     iv.      Stamp Duty Land Tax

            b.       Any non-UK trust which is an express trust but not excluded under Schedule 3A and whose trustees:

                      i.      Acquire an interest in land in the UK; or

                      ii.      Enter into a business relationship where at least one of those trustees is resident in the UK and the trust is not an EEA registered trust.

The following deadlines apply to register with the TRS: 

• Trusts created prior to 4 June 2022 and not already registered as taxable trusts, the deadline is 1 September 2022;
• Trusts created on or after 4 June 2022, the trustees must register within 90 days of creation;
• Any changes as to the details or circumstances of a trust must be updated within 90 days of the change taking place;
• An express trust in existence on or after 6 October 2020 must register by 1 September 2022, even if it has closed prior to this date.

Registration must be completed online via the HMRC website by 1 September 2022 and state the trust details within 90 days, if applicable.