Trust Registration Deadline – September 2022

Monday, 6th June 2022

By MHA Moore & Smalley

In 2017 HMRC established the Trust Registration Service (TRS) which is a digital platform trustees are required to use to fulfil their registration obligations for trusts. The main purpose of the TRS is to reduce the risk of trusts being used as vehicles for money laundering. The register includes details of all parties to the trust including the settlor, trustees and beneficiaries.

The onus to register with the TRS and keep the information up to date falls to the trustees.

Trusts which are taxable (ie those with any UK tax liability such as income tax, capital gains tax, inheritance tax, SDLT) should already have registered with HMRC by 31 January following the end of the tax year in which the first tax charge occurred.

What has changed?
HMRC has extended the TRS to include non-taxable express UK trusts following the UK’s implementation of the EU’s 5th Money Laundering Directive (5MLD).

Express trusts are usually created by a written deed and include most trust plans used for estate and IHT planning, such as gift trusts, loan trusts and discounted gift trusts, which do not normally have any tax charges (income tax, capital gains tax or IHT) year on year.

This is because the underlying asset is often an investment bond which allows tax to be deferred until money is withdrawn, although there is the possibility of IHT periodic charges every 10 years or exit charges if the trust assigns the bond to a beneficiary. Other examples include trusts which hold property or shares where no income is received.

For full article click here