One month to go: countdown to 1 September Trust Registration Service deadline

There is just one month to go until 1 September, when all ‘express trusts’ must be registered with the Trust Registration Service (TRS). One of our trusts experts, Tom O’Riordan explains more about this, as well as the changes for trustees to be aware of.

The Trust Registration Service is a website operated by HMRC which was introduced in 2017. The purpose of the TRS is to prevent money laundering, terrorist financing, minimise tax evasion and provide trustees with a way of applying for a tax reference for a trust.

Trustees are responsible for ensuring a trust is registered on the TRS, if necessary. Previously, only trustees of trusts that pay tax were required to register. Registration involves providing HM Revenue and Customs (HMRC) with information about the settlor, the trustees, the trust’s assets and the beneficiaries.

The TRS has evolved so that the majority of non-taxpaying trusts need to register. Some of the changes are:

• Trustees of UK ‘express trusts’ are required to register regardless of whether the trust pays tax
• New trusts must be registered within 30 days of the creation of the trust (this does not apply to trusts incorporated into a will)
• Trustees must notify HMRC of changes to the trust. For example, HMRC should be notified if a new trustee is appointed.

You may be wondering what an ‘express trust’ is. The clearest answer is trusts that are not named in Schedule 3a of the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020. Trusts named on this list do not automatically need to register. All other trusts are deemed to be ‘express trusts’ and should be registered, unless they are already registered.

The deadline by which ‘express trusts’ need to be registered is 1 September 2022. If an ‘express trust’ is not registered prior to HMRC’s deadline, HMRC has indicated they will send a letter to the trustees to remind them of the duty to register. If the trustees do not comply, a financial penalty will be issued to the trustees.

If you have any questions about an existing trust or a trust you wish to create, please get in touch – we would be delighted to help.

Tom is an associate, solicitor in our wills, trusts & probate team who predominantly helps clients with the creation and administration of trusts and estates, as well as drafting wills and lasting powers of attorney.