What is the TRS?
- It is an online register of the beneficial ownership of trusts operated by HMRC.
- It was set up as a result of anti-money laundering legislation introduced in 2017.
- Deadlines to register the Trust on TRS depend upon:
a) When the trust was created.
b) Whether it was a non-taxable trust or not.
c) If taxable, the nature of the income involved.
Non-taxable Trust Deadlines?
- If the trust was created on or before 6th October 2020 it must be registered by 1st September 2022.
- If the trust was created from 7th October 2020 onwards it must be registered the later of:
a) 90 days following its creation of
b) 1st September 2022
- This applies even if the trust has subsequently closed.
Do all non-taxable Trusts have to register?
- No – the following type of trust do not need to do so if it:
- Holds money or assets of a UK registered pension scheme – like an occupational pension scheme
- Holds life or retirement policies (as long as the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured)
- holds insurance policy benefits received after the person assured has died (as long as the benefits are paid out from the trust within 2 years of their death)
- is a charitable trust that is registered as a charity in the UK or which is not required to register as a charity
- is a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100 – pilot trusts set up on or after 6 October 2020 need to register
- is a co-ownership trust set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’
- is a will trust created by a person’s will and comes into effect when they die (as long as they only hold the estate assets for up to 2 years after the person’s death)
- is for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme
- Is a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets.
- Is a Venture Capital Trust or Child Trust Fund.
- When a person dies without a valid will and the assets in the estate are held in trust before passing to the relatives.
- Is a court order to hold compensation payments.
What is a ‘pilot’ trust?
- It is set up, often for tax planning purposes, by a settlor during their lifetime with a small amount of cash. The intention is that further assets will be placed in it at a later date
Taxable Trust Deadlines?
- Trust created on or after 6th April 2021 must be registered the later of:
a) 1st September 2022 or
b) Within 90 days of the trust becoming liable for tax.
- Trust created before 6th April 2021 where it was liable to income tax or capital gains tax for the first time:
a) 5th October following the end of the tax year the income or gain arose.
- Trust created before 6th April 2021 where it was liable to any other tax (e.g. inheritance tax):
a) 31st January following the tax year that income arose.
What about non-UK Trusts?
- The trust must register if:
a) It becomes liable for tax on income coming from the UK or on UK assets.
b) It acquires UK property or land.
c) It has at least one trustee resident in the UK and enters into ‘a business relationship’ here in the UK.
Penalties for late registration?
- £100 up to 3 months late
- £200 from 3 to 6 months late.
- The higher of £300 or 5% of the tax due if over 6 months late.
Who is responsible for registering the Trust?
- The trustees or they can appoint an agent, such as an accountant, to register the trust.
If you wish to discuss trusts or the trust registration service or other issues please do contact us.