New rules regarding the registration of trusts have been brought into effect by HMRC, bringing wide-reaching changes to all trusts. The Trust Registration Service (TRS) now covers virtually all UK Express Trusts, with the aim of improving transparency around the beneficial ownership of assets held in Trusts with UK tax liabilities. The rules also cover certain non-UK trusts, including Express Trusts which have assets in the UK receiving income or have assets in the UK on which there is a taxation liability.
As of 4 June 2022, the trustees of all Trusts must ensure registration within 90 days of creation. The new rules also apply retrospectively to existing Trusts – with a deadline of 1 September 2022.
All relevant Trusts that were in existence at October 6, 2020, need to be registered – even if these have since closed.
Due to the far-reaching nature of the rules and the very limited number of exclusions, it is estimated that up to a million trusts will be caught in the new legislative changes. However, not all trustees will be aware of their obligations in respect of the changes and many trustees may not even appreciate that they are trustees! Whilst full details have not emerged at the time of writing, there are expected to be penalties imposed for Trusts that are not registered before the deadline.
Trusts are a useful tax planning tool that can be used across a variety of circumstances. Some commonly held trusts that will fall under the TRS rules include:
- trusts set up where people own property at tenants in common,
- trusts created by wills,
- trusts created in lifetime,
- trusts of property – a common type is where parents have their property transferred to their children during their life time.
If you are at all unsure as to whether a Trust you have been involved with setting up, or are a Trustee of, is registerable, O’Donnell Solicitors are able to review this and offer advice. We are offering a fixed price for a ‘health check’ service to provide clients with full peace of mind.
Should we find that a Trust is indeed registerable under the TRS, we can complete the registration on behalf of the Trustees, which again, we are offering at a fixed price.
Jill Waddington is a solicitor specialising in private client law at O’Donnell Solicitors. For further information in relation to registering a Trust, or the TRS, please contact Jill Waddington on 01457 761320 to arrange a convenient appointment.