Registration of Trusts Deadline : 1st September 2022
People create trusts as a way of managing and protecting their assets or vulnerable beneficiaries. There is a wide variety of types of trusts and the purpose behind them – passing on assets in a tax efficient way, protection and control of family assets or where there is a vulnerable beneficiary who needs assistance.
Since 2017, trusts with a tax liability have had to be registered with HMRC’s Trust Registration Service, but this has now been extended to cover most non-taxable trusts. The extension of the Money-Laundering, Terrorist Financing and Transfer of Funds Regulations came into effect in September 2021 and now mandates that all UK Trusts and some non-UK Trusts must register with HMRC by 1st September 2022.
There are some specific exclusions and exceptions, but if a trust does not fall into one of those, it must register even if it does not currently have a tax liability.
The register is not accessible to the public and its purpose is to notify HMRC of trusts. Trusts which have a tax liability will receive a Unique Taxpayer Reference (UTR) which is needed for Self-Assessment Returns, and trusts without a tax liability will receive a Unique Reference Number (URN).
It is the responsibility of the Trustees to register the trust and this can be done by them personally through the HMRC Gateway on the Gov.UK website, or a professional such as a solicitor or accountant can be engaged as agent to complete the registration on behalf of the Trustees. They will be required to provide information about the trust itself, the person who set it up, the Trustees and the beneficiaries. Once the trust is registered, if any details change (apart from the value of the trust), such as changes in Trustees, these must be notified to HMRC within 90 days of the change by updating the register.
Trusts which are liable for the following taxes must register : Capital Gains Tax, Income Tax, Inheritance Tax, Stamp Duty Land Tax, Stamp Duty Reserve tax, Land and Buildings Transaction Tax (Scotland) and the Land Transaction Tax (Wales). In addition all UK express trusts without a tax liability will have to consider whether they also must register or whether they fall within one of the exclusions or exemptions. Trusts established by the Will of a deceased person do not have to register until 2 years has passed from the date of death.
The deadline for all existing UK trusts which have a requirement to register is 1st September 2022.