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Deadline fast approaching: New rules for Trust Registration in the UK

July 2022

The Trust Registration Service (TRS) is a register of the beneficial ownership of trusts. It was set up in 2017 to satisfy the requirements of The Money Laundering and Terrorist Financing Regulations (amendment) 2019. All EU member states have a similar register and the UK agreed to keep the TRS as part of the Brexit withdrawal agreement.

Prior to this, only trusts that paid certain taxes were required to register with the TRS. The new rules have widened the TRS to all UK trusts including ones not liable to tax unless the trust is specifically excluded. And the deadline for this change is fast approaching.

Which trusts need to be registered and when?

All UK express trusts and some non-UK trusts in existence on or after 6 October 2020 must now be registered with the UK TRS by 1 September 2022, including trusts that have closed since that date. There are some trusts which are excluded and do not need to be registered including pension scheme trusts, charitable trusts, will trusts that close within 2 years, life policy trusts and existing trusts with a value of less than £100 and created before 6 October 2020.

How do I register with the TRS?

The lead trustee can register the trust on GOV.UK. It is however beneficial to appoint an experienced trust administrator or solicitor, as they are specifically trained to gather the information required to complete the TRS process and register the trust in the most effective manner.

What are the responsibilities of the trustee?

It is the responsibility of the trustee to effectively register the trust. This extends to the appointment of a solicitor who will take over the registration process for them.

What happens if I don’t register or update a trust with the TRS?

If the trustee fails to register a trust with the TRS then HMRC will enforce penalties.  Trustees must remember it is their legal obligation to register trusts. In relation to changes which need to be made once a trust has been registered, to avoid fines and penalties, any changes must be recorded on TRS within 90 days. Such changes include instances where the trust becomes liable to Income Tax trust or Capital Gains Tax, or if there are any changes to the trustees, beneficiaries, or settlor details.

Data and privacy concerns

Registering any type of information may pose risks of fraud, blackmail and intimidation; this is particularly true of the information contained in trusts. However, the data on TRS is only available to those with a legitimate interest, such as law enforcement agencies investigating money laundering and the financing of terrorists.

Do you have any questions?

The new rules for trust registration can be lengthy and often complex. If you need to register or update a trust, or if something isn’t clear, get in contact with Hardeep Nijher, Senior Associate in the Private Wealth and Succession Planning department at Lawrence Stephens.