The Trust Registration Service (TRS) is the Government’s register of Trusts, which is part of a wider strategy to prevent Money Laundering and Terrorist Financing. Initially set up in 2017, to oversee taxable trusts, the TRS has, since 2020, changed its requirements to include non-taxable trusts. This now means that many of our clients may be obligated to register their trusts, as HMRC’s criteria expand.
Trustees of a trust have a legal responsibility toward the trust, and therefore, trustees must meet the registration requirements set out by HMRC, which includes updating and maintaining the trust record. The information held on HMRC’s trust registration website is not public, and can only be accessed by certain legitimate entities, such as law enforcement.
HMRC requires certain pieces of information to be inputted on their digital site, including, information about the settlors, trustees and beneficiaries, as well as the name of the trust, date of creation, and if the trust has any relationships to non-UK business.
HMRC also requires a ‘Lead Trustee’, who will act as the person receiving the information from HMRC, however this person will be no more or less responsible for the trust than any of the other trustees.
Due to the reasons behind HMRC’s Trust Registration Service creation, refusal to abide by their rules, may result in hefty fines of up to £5000 per trustee. To avoid these fines, one must register their trust(s) with HMRC if they fit the eligibility requirements.
There are lots of different types of trusts which fall under the eligibility for registration, the most common include:
- Lifetime interest trusts; where property or assets are left to a loved one in a will, for their lifetime, on trust, overseen by the trustees.
- Lifetime Asset Trusts; Set up within someone’s lifetime, usually passing the legal ownership of a property to their trustees to hold.
- Co-Ownership Trusts; registerable when the properties legal owners and beneficial owners are not the same. For example, if you have a lifetime Asset Trust, the trustees will be on the title of the property as legal owners, however, the beneficiaries may be the settlors (creators) of the trust.
- Please note that Co-Ownership Trusts usually occur in tandem with other trusts, such as Lifetime Asset Trusts or Lifetime Interest Trusts.
- Period of Estate Administration Trusts; these trusts occur when the estate administration exceeds 2 years after the passing of the deceased.
- Discretionary Trusts; A trust that is set up with certain assets, for example, property, cash, bonds and investments, where it is up to the trustees’ discretion who benefits from the trust.
Please note this list is not exhaustive.
Trusts are required to be registered on the HMRC database within 90 days of their inception. There are some exclusions to this, for example, will trusts have 2 years to register on the HMRC database.
The TRS is commonly updated and frequently reviewed by ourselves, to obtain the latest information from HMRC.
Trustees are able to register the trust themselves online, but if this is impractical, they can appoint an agent, such as ourselves to do so. At Spire, we have a dedicated Trust Registration team to help those uncertain about the policies HMRC are putting in place.
If you are uncertain whether you have a trust in place, or whether your trust is registrable with HMRC, please do not hesitate to contact Spire, where we can assist you with understanding more about your situation.
