There is a legal responsibility on the trustees to register a trust with the TRS and the deadline of September 1st is fast approaching.
There are some exclusions to this but this is a complex new ruling and it would be essential to seek professional advice before making a decision not to register.
Back in March of this year, IFA magazine reported there may be as many as 1 million trusts that could be caught by this new requirement to register on this government list. Transparency of these trusts will inevitably help to combat money laundering, but this new ruling will place an increased burden on trustees and their advisors.
What is the TRS (Trust Registration Service)
The TRS was set up in 2017, as part of the EU Anti Money Laundering directive, it is a register of the beneficial ownership of trusts. (The UK has agreed to keep the register up to date, post Brexit.) Any UK express trusts liable to pay UK tax will be required to register.
When did the new rules come into force?
The new rules came into force in October 2020, with the 1st September deadline for registration of all trusts (with a few exceptions), this also includes trusts that have closed since that date.
From the 1st September 2022, non-taxable trusts are only given 90 days to register, this also includes any changes to the trust.
Talk to a good tax accountant about the other deadlines that impact on the trust.
What are the legal responsibilities of trustees?
1. The registering of the trust or appointing a solicitor to register the trust.
2. Keeping all records of the beneficial owners up to date and accurate
There could be penalties for not keeping the records up to date. This needs to be done annually or when the records are altered.
The details that need to be registered are the lead trustee, the names of any co trustees, the settlor and the beneficiaries.
If you don’t register the trust there are proposed penalties.
There will be an initial letter to remind the trustees, but HMRC can enforce penalties if a trust is purposefully ignoring communication.
The process can be complicated and onerous, so getting legal advice to see if your trust falls within the exclusions or needs to be registered is advisable in the first instance. If you wish to set up a trust, I am happy to have a no obligation initial meeting to review your current assets.
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