Neal Groves considers HMRC’s tax regime
Do you need to act?
The Trust Registration Service (TRS), managed by HM Revenue & Customs (HMRC), has been with us since 2017, and most trustees will already be well acquainted with the need to register and to provide certain information pertaining to the trust, including details of settlors and beneficiaries.
Initially only express trusts (including non-resident trusts) with a UK tax liability were required to register with the TRS – and if this has not already been done, then action should be taken as soon as possible to remedy this by completing a late registration.
In 2020, the UK implemented the Fifth Money Laundering Directive – and as a consequence of this, the types of trust that are required to register with the TRS have expanded dramatically. The looming deadline for registration is 1 September 2022.
What has changed and who now needs to register?
Previously only trusts with a UK tax liability were within the scope of the TRS.
Now the rules state the following trusts are required to register:
Non – UK resident trusts
Non-UK resident express trusts that either:
Trusts excluded from registering for the TRS
There are a limited number of trusts which are not required to register for the TRS (unless they have a UK tax liability). The main groups are:
The deadline for registering the trust is dependent on when it was created and when the tax liability first arose.
If there are any changes to the trust details or beneficial ownership the TRS must be updated within 90 days. HMRC may impose penalties for late registration, or if the details are not kept up to date. Trustees may also find it more difficult in the future to do business with ‘obliged entities’ such as banks, who may require you to demonstrate that the trust is correctly registered.
Trustees must review the position of the trust and consider if the trust is already registered with the TRS or if it now urgently needs to do so before 1 September.
Neal Groves is partner and head of personal tax with Beavis Morgan LLP: beavismorgan.comTags:
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