What is the Trust Registration Service?

by | 15 January 2024

It has now been over five years since the anti-money laundering directive which drove the creation of the Trust Registration Service was introduced.

Initially the registration was triggered by a tax charge, however the requirements were extended to include trusts without tax liabilities, capturing further settlements by the imposed registration date of 1st September 2022 if created on or before 6th October 2020.

Generally trustees should now register with the service within 90 days of creation or becoming liable for tax; a £5,000 penalty can be imposed if the register is not maintained or registered.

Those trusts which are considered to be lower risk from money laundering or terrorist financing are excluded from registering until they have a UK tax charge.

Schedule 3A trusts are generally excluded from registration. Key examples are detailed below:

  • A trust created by will that holds only property from the estate is excluded from registration for a period of two years from the date of death.
  • The above exclusion will not apply where a trust is created by a Deed of Variation.
  • A trust holding an insurance policy excluded from registration during the life of the person assured, continues to be excluded from registration if the trust receives the pay-out from the policy. Similar to a will trust, the exclusion applies for two years following the date of death.
  • Trusts arising from Share Incentive Plans and employee share schemes meeting Parts 2 to 7 of Schedule 3 ITEPA 03 are, subject to certain conditions, excluded from registration.
  • Trusts holding assets of a pension scheme registered in the UK, are excluded from registration.
  • Trusts which hold assets with a total value of £100 or less and which were already in existence before 6 October 2020 are excluded from registration.
  • Though there is no general exclusion from registration for bare trusts, trusts created as a requirement of opening a bank account for a person under the age of 18 or a person lacking mental capacity are excluded from registration.
  • Trusts that are registered as a charity in the UK are excluded from registration.
  • Community clubs and associations are often structured as unincorporated associations and the property of the association may be held on trust by some or all of the members for the benefit of the wider membership. This may be evidenced by the existence of a document known as a trust deed or declaration of trust creating a registration requirement.
  • Personal representatives of estates have to register where they need to submit a return for the administration period following a death; including estates where:
    • the total Income Tax and Capital Gains Tax due for the administration period is more than £10,000;
    • the value of the estate was more than £2.5 million at the date of death; or
    • the value of the estate’s assets sold by the personal representatives in any one tax year was more than £500,000.
  • For non-UK trusts the acquisition of UK land by the trustees on or after 6 October 2020 triggers the requirement for registration, as well as those with a relevant business relationship with a UK business.
  • A partner holding property on behalf of the partnership does not automatically result in a trust that is registrable on TRS. However, it may be declared that property is being held on trust for the partnership (e.g. through a partnership agreement). If so, this is an express trust which would be registrable on TRS, provided that no other exclusions from registration apply.

Liability to tax includes:

  • income tax
  • capital gains tax
  • inheritance tax
  • stamp duty land tax
  • land and buildings transaction tax (Scotland)
  • land transaction tax (Wales)
  • stamp duty reserve tax

Before registering it is worth collating all the information required. This will include:

  • the name of the trust.
  • the date the trust was created.
  • details about any assets within the trust.
  • details about the trustees, settlors and beneficiaries.

Before you can register a trust as a trustee, you will need an Organisation Government Gateway user ID and password (not your personal account).

Taxable trusts must also review the trust details and declare that they are up-to-date by every 31st January through the Trust Registration Service, confirming this through the trust tax return. Non-taxable trusts must update the register within 90 days of a change.

If you require any support with your TRS obligations, please contact us.

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