It may have gone unnoticed to many lay trustees, but on the 1st September 2021 the Government established a new online Trust Registration Service (TRS) and imposed new registration requirements on trustees. It has always been the case that trustees must register with HMRC if the trust has tax to pay, however the TRS has expanded the registration requirement to include UK express trusts (trusts created by written deed) even where they have no UK tax liability.
This means that many trusts that perhaps invest solely in an investment bond where tax is deferred are now required to register their trust online even though they have no tax to pay. The new TRS will affect many inheritance tax schemes including gift trusts, loan trusts discounted gift trusts and reversionary trusts.
Fortunately, there is time to act with a deadline for existing trusts to register not until 1st September 2022. For trusts created after 6th October 2020 the TRS deadline is the 1st September 2022 or within 90 days of being created, whichever is later. Failure to register could land the trustees with financial penalties.
There are some express trusts that are excluded from the registration requirement, unless of course the trust has a tax liability. These include statutory trusts, protection policies in trust, will trusts within 2 years of date of death, bereaved minors trusts, disabled trusts and most spousal bypass trusts. If you are unsure whether your trust needs to be registered, you should speak to a tax professional or your financial adviser.
It is the responsibility of the trustees to register their trust. The good news is that for the majority of non-taxable trusts, the registration process should be very straight forward.
Before you can register a trust, you need to have an Organisation Government Gateway user ID and password. If you do not have one, you can create one the first time you register. To make the registration as easy as possible I recommend that you have a copy of the trust deed to hand. If, however you do need to stop part way through the registration process the information you have input will be saved and you can go back within 28 days to complete the registration.
More information on the trusts that you need to register and the trusts that are excluded can be found at www.gov.uk/topic/personal-tax/trusts.
More detailed technical information can also be found in the Trust Registration Service Manual at www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual.
Wingate Financial Planning Ltd are unable to register a trust on behalf of a trustee, however we may be able to help you in understanding and carrying out your duties and obligations as trustees, including the management of the investments.
