New regulation means trustees must register non-taxable Trusts with the Trust Registration Service by 1 September 2022

The deadline for ensuring that non-taxable Trusts are added to the online HMRC Trust Register is fast approaching. In this blog, Kirsty Royds-Jones, Tax Manager at Knill James, explains what trustees need to do.

What is the Trust Registration Service?

The Trust Register was created as a result of the UK's adoption of the Fourth EU Anti-Money Laundering Directive to provide transparency around the ownership of Trust assets and individuals connected with Trusts.

Which Trusts do I need to register before 1 September 2022?

The Fifth Money Laundering Directive came into force in 2020 and the registration requirements for Trusts are now being extended to include:

• All UK Express Trusts unless covered by an exclusion. An Express Trust is simply a Trust that was deliberately created.

• Non-UK Resident Trusts which either acquire land or property in the UK, or have at least one UK Resident Trustee and enter into a business relationship with an 'obliged entity', such as a financial institution, legal professional or accountant, etc.

• Non-Express Trusts and certain excluded Trusts which have a UK tax liability. Non-Express Trusts are usually imposed by Courts or created by legislation.

This means that even if a Trust does not have a UK tax liability, it will now need to be registered on the online HMRC Trust Register if it falls within one of these far-reaching criteria.

Are there any Trusts which I don't have to register before 1 September 2022?

Yes. The most common types of Trust that are excluded, provided that they are not liable to pay UK tax, are:

• Charitable Trusts
• Pension Schemes
• Trusts required to open a bank account for a child
• Trusts where a disabled person is the beneficiary
• Trusts for bereaved minors or adults aged 18 - 25
• Trusts holding life or retirement policies that only pay out on death, terminal or critical illness or permanent disablement, or to meet healthcare costs of the person assured

How do I register a Trust on HMRC's online Trust Register?

The trustees are responsible for ensuring that the Trust is registered, and they should nominate a lead trustee to be the main point of contact for HMRC.

The lead trustee must first create an Organisation Government Gateway Account. They can then complete the Trust Registration via this account. It will need to contain information regarding the settlor(s), trustee(s), beneficiaries and assets within the Trust.

You can find further guidance on how to set up an account and what information you need to enter here: https://www.gov.uk/guidance/register-a-trust-as-a-trustee

Are there any penalties if I miss the deadline?

HMRC have indicated that they may not automatically charge penalties if a Trust is not registered by the due date, but failure to register could result in the following penalties:

• A £100 penalty for registrations made up to three months after the due date
• A £200 penalty for registrations made three to six months after the due date
• A £300 penalty for registrations made more than six months after the due date

How can Knill James help?

If you have a Trust and don't know whether it needs to be added to the Trust Register, we can review the Trust Deed for you and confirm the position.

We can also complete the online Trust Registration if you have a Trust that requires registering.

If you'd like us to help, please contact Kirsty Royds-Jones on 01273 480480, and she or one of our tax team will be pleased to assist you.