4th November 2022Trust registration service – what you need to know following the 1 September deadline

Article written by Marc Brinklow, Trust Manager

As a quick recap, the Trust Registration Service (“TRS”) is an online system managed by HMRC, which requires trustees of most ‘express trusts’ (trusts created deliberately by a Settlor) to provide information about the trust, including its assets and details of their beneficial owners.

We have previously covered who needs to register on the TRS including registration rules and exclusions – for more information, read the article here. Now that the initial 1^st September deadline for registering existing non-taxable trusts has passed, there are a number of points you need to be aware of when it comes to ongoing administration. Marc Brinklow, Trust Manager, outlines the important next steps to consider.

What is the registration deadline

The deadline is dependent on when the trust was created, whether it is taxable or not and if the trust is already registered for Self –Assessment (SA) for Income Tax or Capital Gains Tax. On the whole, new trusts created on or after 1 September 2022 now have 90 days in which to register, but further specificities are outlined below.

Non-taxable trusts

• Non-taxable trusts in existence before or on 6 October 2020 should have all been registered by 1 September 2022.

• Non-taxable trusts created after 6 October 2020 must be registered within 90 days of being created or by 1 September 2022 (whichever is later).

Taxable trusts created before 6 April 2021

• If the trust is already registered for SA and incur a UK tax liability in a given tax year, then it must be registered by 31 January after the end of that tax year.

• If the trust is not registered for SA and incurs an Income Tax or Capital Gains Tax liability for the first time in a given tax year, then it must be registered by 5 October after the end of the tax year.

• If the trust is not registered for SA and incur other taxes in that tax year (other than Income Tax and Capital Gains Tax), then it must be registered by 31 January after the end of that tax year.

Taxable trusts created on or after 6 April 2021

• The trust must be registered within 90 days of the trust becoming liable for tax or 1 September 2022 (whichever is later).

How to register under the TRS

Trustees can register trusts under the TRS via GOV.UK.

This will involve setting up a Government Gateway Account for the trust which enables the trustee to complete the registration. This will not be the same as their personal Government Gateway account if the trustee also uses HMRC online services for Self-Assessment. It will be a separate account specifically for the trust.

If registering more than one trust, then separate Government Gateway accounts will need to be created for each trust.

Alternatively, the trustees can appoint an agent to register on the trust’s behalf.

What information is required by the TRS

In order to register, the following information will need to be provided:

• Full name of the trust
• The date on which the trust was created
• To say if the trust is an express trust or not
• Details about whether a non-UK trust has a business relationship in the UK
• Details about any UK land or property the trust has purchased
• Details of the Settlors, trustees and beneficiaries (named and classes of beneficiaries)
• Details of any protectors

What happens after a trust has been registered?

If you are registering a trust that is liable to tax, HMRC will send the lead trustee a Unique Tax Reference (“UTR”) usually within 15 working days.

If the trust is not liable to tax, the lead trustee will be issued a Unique Reference Number (“URN”) within the same timeframe.

You will need this reference to update and maintain the trust records on the TRS.

Maintaining and updating the trust records on the TRS

The trust details need to be kept up to date and any changes to the beneficial owners must be reported within 90 days on the TRS.

If the trust is liable to UK tax for any tax year, you must declare on the trust register that the details of the persons associated with the trust are accurate and up to date. You must do this whether you’ve made any changes or not.  The trustees will also need to tick a box when preparing the trust’s Self-Assessment tax return to confirm that the details on the trust register are up to date.

If the trust is not liable to UK tax, then there is no need to submit an annual declaration.  The trustees will only need to update the trust register as and when there is a change to the trust details.

What are the penalties for TRS failures?

HMRC have recognised the registration process is new and unfamiliar for many trustees.  There will be no penalty for a first offence of failure to register or late registration, unless due to deliberate behaviour on the part of the trustees.

Where failures to register are due to deliberate behaviour, a £5,000 penalty may be charged per offence, otherwise HMRC will just issue a warning letter at which point the trustees must register.  Penalties for deliberate non-compliance will be applied on a case-by-case basis.

Who can view the information held on the TRS?

Details of the register will only be released to those with a legitimate interest, such as enforcement agencies where there is evidence of money laundering or terrorist financing activities.

HMRC will not share data on certain types of trusts, such as non-taxable trusts that are only registered because they are liable to UK taxation, schedule 3A trusts and non-UK trusts with no trustee’s resident in the UK that are only registered because they hold UK land or property.

Details of specific individuals cannot be disclosed if HMRC have been told that they are under 18 or lack mental capacity or where access to information will expose an individual to a risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation.

Please get in touch to see how we can assist or to discuss specific circumstances.