Since 2017 there has been a requirement under anti money laundering regulations for all taxable relevant trusts, those which had a tax liability, to be registered with H M Revenue & Customs (HMRC) on their on-line Trust Registration Service (TRS).
The trustees of these trusts have had to provide certain information to HMRC including details about the settlor(s), trustees and beneficiaries, including their names, date of birth, country of residence, nationality and nature and extent of any beneficial interest.
Detail of changes
It was announced in October 2020 that all relevant trusts not just those who are liable to pay tax will need to be included on the Trust Registration Service going forward, unless specifically excluded, and will have to provide the same information as taxable relevant trusts.
The reporting requirements will now therefore include trusts such as bare trusts, trusts which do not have income and so have not previously had to complete a trust tax return and certain financial products used for inheritance tax planning purposes such as gift and loan trusts.
The deadline to register these types of trust is Autumn 2022 with further guidance expected from HMRC in due course with an exact date.
HMRC have excluded certain types of trust from the requirement to register under the TRS. They are as follows:-
- Legislative trusts imposed by statute eg. Trusts arising on intestacy or trusts of land that are considered to arise automatically when a home is jointly held (By spouses, civil partners, unmarried couples or friends);
- Trusts imposed by the order of a court or tribunal;
- Pension scheme trusts which are registered under the Finance Act 2004, Part 4;
- Trusts of life insurance policies which pay out on death, terminal illness or permanent disablement or to meet healthcare costs for the assured individual – To be excluded the policy must not have a surrender value;
- Charitable trusts registered in England and Wales, Scotland or Northern Ireland;
- Pilot trusts created before 6 October 2020 with assets of less than £100. If further assets are added to this type of trust then it will then be required to register;
- Trusts arising on death by will, until two years from death have elapsed;
- Co-ownership trusts – Trusts of jointly held property where the trustees and beneficiaries are the same persons – Intended to include jointly held assets as held as ‘tenants in common’ such as land and property or joint bank accounts;
- Trusts which meet certain legislative requirements – This includes Bereaved Minors Trusts and 18-25 trusts set up by a will (unless these trusts have a tax liability) and also trusts for the maintenance of historic buildings and personal injury trusts.
Once the trust has been registered, if any changes take place, trustees will have 30 days from the date of becoming aware of those changes to update the TRS.
If you are aware of any trust arrangement which has not previously been registered and would like more information regarding the reporting obligations please contact Tracey Macintosh or Simon Butler.
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