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HMRC Trust Registration 31st August Deadline

Trust registrations – what you need to know

Whether you are a trustee of a trust or a professional adviser to trustees of trusts you will probably have heard about HMRC’s Trust Register. What you may not be aware of is that, as a result of the 5th Money Laundering Directive, a number of trusts not previously  required to register must now do so by 1st September 2022.

As the deadline is less than two months away, we are seeing an increase in interest for our online Trust Registration Service and wanted to provide some guidance to advisers to know what they need to do to comply.

Whether your trust needs to be registered with HMRC depends on the type of trust and whether or not it gives rise to a charge to UK tax. There are a number of key exceptions which apply to certain trusts, so we have set out below a quick reference guide for you to review to see if you need to act.


Does my trust need to be registered?

The first thing to note is that this note only relates to UK resident trusts. We do not advise on non-UK trusts so if your trust is an overseas trust, we recommend speaking to your trustee service provider to take advice from them on your obligations in the UK as regards that trust.

Assuming the trust is UK resident the next question to consider is: does the trust give rise to a UK tax charge? If the answer to this question is “yes” then the trust needs to be registered (even if it falls within the exceptions below). As stated above, this can be done using our online portal here.

A ‘will trust’ does not come into existence until the death of the testator and therefore is not within the scope of this legislation and does not need to be registered.


Exceptions to trust registration

If any of the following apply to your trust, then you may not need to register the trust with HMRC:

  • The trust is used to hold life insurance policies that only pay out on death, terminal or critical illness, or to meet the healthcare costs of the person assured
  • The trust is holding insurance policy benefits received after the death of the person assured and the benefits will be paid out of the trust within 2 years of the death
  • The trust is a will trust created by a person’s will which came into effect on the person’s death and will be paid out of the trust within 2 years of the death
  • The trust is a charitable trust that is registered as a charity in the UK, or which is not required to register as a charity
  • The trust is a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100
  • The trust 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’ (N.B. this does not refer to a life interest trust of real property)
  • The trust is a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or assets
  • The trust is for bereaved children under 18, or adults aged 18-25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme

If you are unsure as to whether your trust needs to be registered we would recommend speaking to HMRC or reviewing HMRC’s Trust Registration Manual here


What happens if you fail to register?  

Trustees are legally responsible for trusts, and this includes trust registration. Trustees need to think carefully about whether to undertake this work themselves or whether to appoint an adviser to carry this out on their behalf.

HMRC can charge penalties for non-compliance with the new rules and reserve the right to charge more stringent penalties if trustees continue to ignore the registration requirements.

To find out more about our Trust Registration Service click here. 

Please note: the rules do not only apply to existing trusts - all trusts created after 4th June 2022 will need to be registered within 90 days (subject to the above exceptions).

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