The Trust Registration Service (TRS) is a register of Trusts and beneficiaries and was first set up in 2017. Trusts that paid certain taxes were then required to register with the TRS.
The TRS was introduced by the UK Government to provide greater transparency around the ownership of Trust assets and individuals connected with trusts.
New rules came into force in October 2020 that now require most UK Trusts, bar a few exceptions, to register with HMRC by the 1st September 2022.
This article will confirm those Trusts that need to be registered, along with Trustee responsibilities and the consequences for missing the deadline.
Requirement to Register
Many Trusts, including non-taxable Trusts, in existence on or after 6 October 2020 are required to register with the TRS by the 1st September 2022
Trusts created after 1 September 2022 must register within 90 days.
Exclusions to Register
There are some exclusions to this rule, where the following Trusts do not require registration:
- Pension schemes
- Charitable trusts
- Will trusts that are wound up within two years of death
- Policy trusts paying out on death or critical illness
- Existing trusts with a value of less than £100 created prior to 6 October 2020
Responsibility of Registration
The legal responsibility for registration lies with the trustees.
Where there are multiple trustees, it is a matter for the trustees to decide and appoint a lead trustee to complete the registration process. However, all the trustees remain legally responsible for the Trust and the lead is simply a contact point.
When a trust is registered for the first time that is a new registration process. In later years the trustees will be required to either ensure the Trust update the details of the existing registration are maintained or, in the case of a taxable trust, confirm that the details remain up to date and accurate.
Trustees can appoint agents to register and manage the Trust on their behalf; a service Rudlings Solicitors is happy to offer.
What happens if you don’t register?
There is a legal obligation for trustees to register the trust with TRS. If you do not register your trust or keep the details on the register up to date, HMRC enforces penalties.
It’s proposed that these penalties are not as severe as the self-assessment penalty regime, and that ‘nudge letters’ will be sent for first offences with a proposed penalty of £100 for any subsequent offences.
Next Steps
It is important that Trustees fully understand their responsibilities in regard to the TRS in order to prevent penalties.
If you have any questions, wish to understand if your Trust requires registration or wish Rudlings Solicitors LLP to act as your agent and register the Trust, please do contact our Trainee Solicitor Jade on 01842 810300 or jade.westhead@rudlingsllp.co.uk.