Trust Registration Service FAQs
From 1st September 2022, it is mandatory for all eligible trusts in the UK to be registered with HMRC's Trust Registration Service.
What is a trust?
A trust is an arrangement in which a person (known as a Trustee) holds or ‘looks after’ assets (often property or money) for others (known as Beneficiaries).
What is the Trust Registration Service?
The Trust Registration Service (TRS) is an online register managed by HMRC and which records trusts and their beneficial owners in the UK.
Why do I need to register my trust with HMRC?
The Trust Registration Service was set up in 2017 as part of an anti-money laundering directive. Many UK Trusts must be registered to satisfy the requirements of The Money Laundering and Terrorist Financing (Amendment) Regulations 2019.
In October 2020, new rules came into force that stipulated non-taxable trusts in existence on/after 6 October 2020 must be registered with HMRC by 1st September 2022, unless exempt from registration. Those trusts exempt from registration are very limited.
What is an express trust?
An express trust is a trust that is usually written in the form of a deed or writing (though does not have to be) and there has been a clear intention to set the trust up.
There must be three certainties:
- what property is subject to the trust (to include any cash funds);
- who the beneficiaries are;
- a clear intention by the settlor to set the trust up.
An express trust may be created, for example, by:
- A person’s Will after they have died;
- A Declaration of Trust (although not all Declarations of Trust require registration);
- A Deed of Variation.
What is a bare trust?
Bare trusts are usually where assets are held in the name of the trustee for a beneficiary. In general, bare trusts are often used for children (those under 18). For example, a parent may hold a sum of money or an investment for the child until they reach the age of 18. Bare trusts may also be express trusts.
Do I need to register my trust with HMRC?
All relevant trusts need to be registered, unless exempt. This includes UK express trusts. This includes all taxable and many non-taxable trusts.
Any non-express UK trusts that include the acquisition of property or land, or have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK must be registered.
If the trust is not resident in the UK, you must register it if it becomes liable for tax from UK assets.
If the trust has a tax liability and is covered by a relief, the trust needs to be registered. Then, any relief can be claimed through Self Assessment returns.
If you are unsure whether your trust needs to be registered, you should seek advice from a specialist solicitor or financial adviser. Please get in touch with us if you require advice about registering your trust.
Do I have to register a bare trust with HMRC?
As previously mentioned, various trusts are registrable depending on the circumstances and assets within a Trust. If you are unsure whether a Trust needs to be registered, please seek legal advice.
Do you need to register a Declaration of trust with HMRC?
If the co-owners named on the Register of Title are the same as those parties to the Declaration of Trust then it may not need to be registered with HMRC. If any of the parties to the Declaration of Trust are not named on the Register of Title for the property but have an interest via the Declaration of Trust, it may have to be registered with HMRC.
To clarify, if you are unsure whether a Trust needs to be registered, please seek legal advice.
What is the Trust Registration Service deadline in the UK?
The deadlines for the Trust Registration service in the UK are:
- Non-taxable trusts in existence on or after 06 October 2020 must be registered by 1st September 2020 – even if now closed
- Non-taxable trusts created after September 2022 must be registered within 90 days
- Taxable Trusts set up on or after 04 June 2022 must be registered within 90 days of the trustees becoming liable to pay UK taxes.
- Changes to trusts must be registered within 90 days of the change
What is the cost of trust registration?
There is no cost to register a Trust in the UK.
In summary, HMRC do not charge for the Trust Registration Service. This is a free online process.
If you require assistance with registration from a solicitor or professional advisor, it is likely they will charge a fee for this service.
At Crane & Staples, we charge a modest fee for assisting clients with the Trust Registration service. Please get in touch with us to find out more about our fees for this service.
What is needed to register a trust?
The following information is required to register a trust with the HMRC Trust Registration Service:
- Name of the trust
- Date the trust was created
- Whether the trust is taxable or non-taxable
- Details about any UK land or property the trust has created
- Details of any business relationship in the UK (if a non-UK trust)
You must also provide details of the following people to the HMRC Trust Registration Service:
- The lead trustee
- The co-trustees
- The settlor
- The beneficiaries
The HMRC Trust Registration Service is an online form. That is to say, you will be prompted to provide all the required information within this form.
However, if you require any assistance completing the form, please do not hesitate to contact us.
How do I register a trust in the UK?
You require an Organisation Government Gateway (login details) to complete the process. This is different to an Individual Government Gateway that you may already have (to access other HMRC services). In any case, you must have a different Organisation Government Gateway user ID for each trust you are responsible for.
What are the penalties if I have not registered a trust by the deadline?
If you have deliberately not registered your trust by the deadline, then you may face penalty fines.
HMRC released the following guidance on 17 May 2021, and which was updated on 2 August:
In recognition of the fact that the registration requirement is a new and unfamiliar obligation for many trustees, there will be no penalty for a first offence of failure to register or late registration of a trust unless that failure is shown to be due to deliberate behaviour on the part of the trustees.
Where failures to register are due to deliberate behaviour on the part of the trustees, a £5000 penalty may be charged per offence.
Which trusts are excluded from the Trust Registration Service?
There are very limited exclusions from the Trust Registration Service.
Eligibility for exemption from registration depends on the specific circumstances of the Trust.
However, some scenarios where a trust may be exempt from registration (assuming there is no tax liability) include:
- The trust holds money or assets of a UK registered pension scheme
- The trust is used to hold life or retirement policies, that only pay out on death, terminal or critical illness or disablement
- The trust is holding insurance benefits to be received after death (so long as they are paid out within 2 years of death)
- It is a charitable trust registered with a UK charity
- It holds no more than £100 and is a pilot trust that was set up before 06 October 2020
- Co-ownership trusts whereby two or more people own a property as tenants in common
- A trust set up by a person’s will and that comes into effect on their death and providing they only hold the asset in the Estate for 2 years after the person has died
- It’s a trust for bereaved children under 18, or adults between 18 – 25, set up under the Will of a deceased parent or under Criminal Injuries Compensation Scheme
- It’s a financial or commercial trust created in the course of business or service and is holding client money or other assets
This is not an exhaustive list of possible exemptions. Therefore, we strongly recommend that you seek advice from a solicitor if you are unsure whether your trust is exempt from registration.
Where can I find guidance on registering a trust with HMRC?
HMRC have released a detailed guide to the Trust Registration Service.
Nonetheless, if you require advice from a Solicitor, we would be pleased to assist you with registering your trust.
Please note that most professional advisers, including solicitors and financial advisers, will charge a fee for this assistance.
How can a Solicitor help me register a trust with HMRC?
Solicitors and other professional advisors can register a trust with HMRC on your behalf. This may be useful if you are unsure about the circumstances and eligibility of your trust. It may also be useful if you do not have the time or resources to register your trust yourself.
At Crane & Staples, we have worked towards the deadline to ensure that our clients’ trusts are registered correctly with the HMRC Trust Registration Service. Although it is a new process, we have already gained lots of experience by registering these trusts for our clients. This means we are extremely well-versed in the trust registration procedure.
We would be pleased to assist you with registering your trust with HMRC. Please contact us by telephone on 01707 329333 or by email firstname.lastname@example.org if you require advice and guidance on the Trust Registration Service. We look forward to hearing from you.