As a trustee, you have many responsibilities, and for some, this will include the need to register the trust with the Trust Registration Service before September 1st, 2022, or you could incur a fine.
What is a trust?
A trust is an arrangement that sets money or assets aside for somebody else (known as the beneficiary). A trustee is responsible for managing the assets, and any decisions must be made in the best interests of the beneficiary/beneficiaries. Trusts are set up for numerous different reasons. One common reason is the passing of assets to children for inter-generational wealth planning.
Any trusts set up after the September 2022 deadline will have 90 days to register with the TRS, or they could potentially suffer legal consequences. Those that do not register will receive “nudge letters”, and fines are proposed at £100 for offences; however, if trustees are found to be deliberately ignoring the requirements to register with the TRS, higher penalties could be imposed.
What is the Trust Registration Service?
Set up in 2017, the Trust Registration Service (TRS) is a part of an anti-money laundering directive; however, new rules were introduced in 2020 that require most trusts based in the UK (and some non-UK trusts) to be registered with HMRC before the September 2022 deadline.
All UK express trusts must be registered with the TRS, unless they are on the exclusion list. Most trusts are express trusts; An express trust refers to a trust set up by a settlor, as opposed to a trust set up through a court or a legal decision.
However, some express trusts do not need to register with the TRS. The exclusions are;
How do you register a trust with HMRC?
The responsibility for registering a trust with HMRC lies with the trustee(s). One trustee must be nominated as the lead trustee. This individual will be the main point of contact for HMRC. If the lead trustee does not already have a Government Gateway ID for the trust, they must register and create one. Using the gateway account they can update HMRC on any changes to the registered trust.
When registering a trust, you’ll need the following details:
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