Girlings’ Tax Manager, Joanne Beale explains the implications for trustees of the new registration rules which were introduced on 6 October 2020.
In June 2017, HMRC set up the Trust Register as a result of the 4th Money Laundering Directive (4MLD). The Trust Register is maintained via the Trust Registration Service (TRS), an online service under which trustees are required by law to register new trusts, maintain current trusts and close trusts. Initially only taxable trusts were required to register using the new TRS. New rules were introduced on 6 October 2020, as part of the UK’s implementation of the 5th Money Laundering Directive (5MLD), which extend the scope of the trust register to all UK and some non-UK trusts for trusts that are currently open, whether or not the trust has to pay any tax, with some specific exclusions. These rules extend to all new trusts that meet the registration criteria. The majority of trusts whether taxable or non-taxable will now need to be registered and the Trustees will need to maintain the trust using the new TRS.
The registration of non-taxable trusts using the TRS commenced on the 1 September 2021. HMRC have provided the following deadlines for registration of non-taxable trusts:
- Non-taxable trusts in existence on or after 6 October 2020 must be registered by 1 September 2022.
- Non-taxable trusts created after 1 September 2022 must be registered within 90 days of creation.
In addition to deadlines for registering existing and new non-taxable trusts Trustees now have a responsibility to keep the Trust Register up to date with relevant changes. Changes to the trust details and/or circumstances must be notified within 90 days of the change.
Penalties may apply if the Trustee(s) fail to register or update the information on time, and cannot show HMRC that they took reasonable steps to do so.
The penalties are:
- £100 for registering up to three months after the deadline
- £200 for registering between three to six months after the deadline
- £300 or 5% of the total tax liability in the relevant year (whichever is higher) for registering more than six months after the deadline.
Our in-house tax team can advise you on the above and undertake the Trust Registration for you and /or the updating of the Trust Register. Our expert solicitors can provide advice and assistance in dealing with both existing trusts and the setting up of new trusts.
For further information see: