Are you prepared for the Trust Registration Service (TRS) deadline on 1 September 2022?

Trusts with a registration requirement

The TRS is relevant to:

• All UK express trusts, unless they are specifically excluded.
• All non-UK express trusts, that:
  • Acquire land or property in the UK on or after 6 October 2020; and/or
  • Have at least one trustee resident in the UK and enter into a “business relationship” with a UK service provider.

If the trust is not resident in the UK, you must register the trust if it becomes liable for tax on income coming from the UK or on UK assets.

Non-UK trusts will not have to register if all of the trustees are non-UK residents, there’s no UK tax liability and the trust does not hold land or property in the UK directly.

If you’re a UK resident trustee of a non-UK trust, you should be aware that the trustees entering into a “business relationship” in the UK, could mean the trust has a registration requirement. 

What trustees should look out for

If you’re a trustee of a UK trust, the trust could have registration requirements, even if there is no liability to tax.  Some examples where you might get caught out include where you are a trustee of the following:

• Trusts where an individual holds an asset, as trustee for another person, that are documented in a Declaration of Trust.
• Nominee arrangements where an individual holds an asset, as a nominee for another person, that are documented in a Nominee Agreement.
• Where a parent holds assets in a bare trust (such as real estate, investments or premium bonds) on behalf of their minor children.
• Insurance policies with a surrender value that are written in trust will need to be registered, including trusts with investment bonds.

Trusts that are exempt from registering

There are a number of categories of trusts which are specifically exempt from registering on the trust register, as long as there is no UK tax liability, including but not limited to the following:

• Trusts holding life or retirement policies providing that the policy only pays out on death, terminal or critical illness, temporary or permanent disablement, or to meet the healthcare costs of the person assured.
• Will trusts created upon death during the first two years after death, provided the assets added to the trust are only from the estate.  This includes trusts that only receive death benefits from life insurance policies.
• Pension trusts that are already registered with HMRC as a pension scheme.
• Charitable trusts that are UK regulated.
• Co-ownership trusts where the trustees and beneficiaries are the same person, for example, to hold a share of property as tenants in common, joint bank accounts or to hold other assets jointly.
• Trusts established prior to 6 October 2020 where the value of the assets are under £100 provided no further assets are added.
• A financial or commercial trust created in the course of professional services or business transactions for holding client money or other assets.

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