Why do you need to register your Trust?

Until recently, you only needed to register your Trust with HMRC if there was a known and chargeable tax event and a liability to pay tax, such as: 

      • Capital Gains Tax
      • Income Tax
      • Inheritance Tax – Settlement of relevant property
      • Inheritance Tax – 10 Year Anniversary / periodic charge
      • Inheritance Tax – Exit charge
      • Corporation Tax

Having signed up to the 5th Anti-Money Laundering Directive, The UK and therefore HMRC have made it a requirement for most Trusts to be registered with them, regardless of their tax position, to ensure they are not being used for money laundering purposes and, in most cases, the deadline for registration of trusts is September 2022.

Not sure if your Trust needs to be registered? 

We also perform a Trust Audit Service to provide certainty on registration requirements.

Registering your Trust with HMRC

Now that the rules and the required processes have been finalised by the government, we have introduced a service designed specifically to help Settlors and Trustees comply with this new legislation.  

About the Service

Our Trust Registration Service is open to both existing and new clients. However, for existing clients our initial assessment and personalised Trust Registration Guidance is provide free of charge. For new clients our fees are £295inc VAT. 

To register for assistance please select the appropriate button.

 
 

More information & frequently asked questions

The new legislation requires that a great deal of Trusts needs to be registered. To clarify this further, registration will be required if the trust in question is a UK trust and is classified as an express trust, or if the trust in question is a non-UK express trust but

  • acquires land or property in the UK

  • have at least one trustee resident in the UK and enter a ‘business relationship’ within the UK

  • A Trust will also need to be registered now if the trust has a tax liability, even if the liability can be mitigated by the claiming of a permissible relief.

    Finally, Trusts that have been closed since 6th October 2020, unless they are exempt from registration, will also need to register on the Trust registration Service.
    You do not need to register your trust if any of the following apply, unless it has a liability to UK taxation:

  • the trust is used to hold money or assets of a UK registered pension scheme

  • the trust is used to hold life or retirement policies

  • the trust is holding insurance policy benefits received after the death of the person assured

  • it 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 will need to register

  • it is a co-ownership trust set up to hold shares of property or other assets which are jointly owned by two or more people for themselves as ‘tenants in common’

  • it is a will trust created by a person’s will and comes into effect on their death

  • it is a trust 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
  • Very simply, since the law changed, every trustee of an express trust needs to decide if the trust they are responsible for needs to be registered with HMRC or whether their trust is on the exempt list. Registration time limits apply and new trusts need to be registered within 90 days of their establishment, with existing trust having a deadline of September 2022.

    Once the trustees have done this they need to decide if the trust will need to complete a tax return. If tax is due to HMRC, the tax return could be an initial return with no need for any ongoing returns or the requirement could be for ongoing returns to be submitted.

    Either way, these tax returns will need to be submitted by 5th October each year for most chargeable events and by the 31st of January for other chargeable events.

    Trusts are registered online, using the government Trust Registration Service.

    Once the data required for registration has been collected, the Trustees then need to assess the type of asset held, when they were acquired, and the value of the assets and details of any income generated by the assets at the time of settlement and the time of registration to see if a tax liability exists. If a tax liability does exist, the trustees need to report this to HMRC.

    After the trust is registered, any changes to the settlors, trustee or beneficiary details need to be amended on the register in the year that they occur.

    Before registration, a Government Gateway ID number needs to be confirmed, but once it is, the Trustees need to gather together certain registration data including:

    the name of the Trust
    the name of the trust
    when it was established
    the settlors’ up to date details, including current and deceased’s settlors
    all the trustees’ up to date details
    the up-to-date details for the beneficiaries
    about the trust assets such as registration numbers for shares or for land and other trust property
    if the trust has any relationships to businesses inside the EEU.

    All Trustees have equal responsibility for the Trust, but a Lead Trustee needs to be appointed who will become the main point of contact and responsible for receiving any information, such as the Trust’s Unique Tax Reference if registering a taxable trust or the Unique Reference Number if registering a non-taxable trust.

    The Lead Trustee first responsibility will be for entering the information required about the trust, the settlors, the other trustees, and the beneficiaries and will then be responsible for keeping everything up to date.

    It is the Lead Trustee that HMRC need to make contact about the trust it is the Lead Trustee who will receive and be responsible for all communications about any tax matters. Those familiar with the working of HMRC will not find this too onerous but it will be useful to know a few rules that will apply:

    Trusts, which do not have to register as express Trusts but become registerable because Trustees acquire tax liability, must be registered by 31 January or 5 October in some cases following the end of the tax year in which the liability rose. Non-taxable Trusts that become taxable must be recorded within 90 days.
    Non-taxable Trusts but express Trusts are now required to be registered by 1 September 2022 or within 90 days from the date of creation and changes to these Trusts must also be recorded within 90 days of the Trustees becoming aware of the changes.
    If a Trust is taxable, the Trustees must declare the Trust is up to date on an annual basis, with the deadline being 31 January of each year.
    Closed Trusts must be registered if the Trust was in existence on or after 6 October 2020. The closed Trust can be registered with the required information and closed immediately to record the fact that the Trust has ceased.

    In simple terms, a Trust must be registered for taxation and anti-money laundering purposes with HMRC if the Trust has, or it becomes, liable to pay capital gains or income tax on the assets held within it, including Stamp Duty Reserve Tax or Land Tax but also including inheritance tax triggered by time periods and activity within the trust. In these cases, a tax return will need to be submitted. If the trust has a tax liability but this is covered by a relief, the trust will need to be registered so the relief can be claimed through the Self-Assessment regime.

    Trustees of a Trust which requires registration, but which is not registered, or who do not submit a tax return where it is necessary to do so may be liable for a fine of £100. This is similar to the non-reporting fine regime of self-assessment and other.

    Our Trust Audit Service

    Not registering a trust or submitting a tax return when one is due can result in fines being levied which is an unnecessary and costly expense on the Trustees.

    This can be avoided by knowing for certain whether the trust does indeed need to register and whether a tax return does need to be completed. 

    Our Audit Service has been designed with both settlors and trustees in mind. The purpose of the audit is to provide certainty for the Trustees with regards to the status and the registration requirements of their trusts. 

    However, the Audit goes further than simply deciding what to do next, it is designed to also consider any unforeseen future tax liabilities that could fall on the trust, and which could detriment the settlor’s estate.  

    By the end of the audit process, we will ensure that you know if: 

    • the trust does or does not need registering 
    • the trust requires the submission of a tax return 
    • the trust assets are likely to trigger a chargeable event in the future 
    • the settlor’s estate is as tax efficient as it can be establishing if all tax reliefs are still available to it