Trusts are a way of managing wealth, money, investments, land or property, for you, your family, or anyone else who you’d like to benefit. New rules were introduced on 6 October 2020 which extend the scope of the trust register to all UK and some non-UK trusts that are currently open, whether or not the trust has to pay any tax, but with some specific exclusions.
From 1 September 2021, the extended Trust Registration Service (TRS) opened for non-taxable trust registrations with non-taxable trusts having until 1 September 2022 to register. Under the new rules, organisations and persons involved in preventative work in the field of anti-money laundering, counter terrorist financing and associated offences, can request access to details on the register about the people associated with a trust.
The information will only be released on request in certain limited circumstances and anyone with a legitimate interest will be able to view information on the TRS from late 2022. HMRC has stated that “each request will be reviewed on its own merits, and access given only where there is evidence that it furthers work to counter money laundering or terrorist financing activity”.
There are also safe-guarding measures to protect trusts with minors and vulnerable beneficiaries from requests for information from third-parties.
Trusts that need to be registered are broadly all UK express trusts, unless they are specifically excluded; non-UK express trusts: acquire land or property in the UK and have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK. If the trust needs a Unique Taxpayer Reference (UTR) for Self Assessment purposes, it must still register to get this, even if it’s highlighted in the exclusion list.
Other less common types of express trusts which are set up for particular purposes are also excluded from registration unless they have to be registered because they are liable to pay tax. These are set out in the legislation and will be described in the detailed guidance.
Trusts which are not set up deliberately by a settlor but are imposed by Courts or created by legislation, are not ‘express trusts’ and therefore do not have to register unless they are liable to tax.
You should obtain professional advice if you are unsure whether a product or arrangement is a trust or if it should be registered. The trustees or agents will have to give some basic information about the persons involved in the trust (the settlors and beneficiaries). This will apply to both taxable and non-taxable trusts.
Registerable taxable trusts are required to register by 31 January following the end of the tax year in which the trust had a liability to UK taxation, or 5 October after the end of the tax year for a first time liability to Income Tax or Capital Gains Tax.
The Money Laundering Regulations currently require registerable express trusts to register on TRS by 10 March 2022. HMRC has announced they will extend this deadline until 1 September 2022, to give trustees sufficient time to register
From 2022 onwards, any beneficial ownership information of a trust registered on TRS must be kept updated. Trustees must notify HMRC of any changes to registered information within 90 days from the date the trustees become aware of the change: further guidance and confirmation of procedures is expected from HMRC in due course.
We understand that every person’s financial and family situation is totally unique. If you have any concerns about your financial plans, please contact us.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TAXATION & TRUST ADVICE.