The Trust Registration Service (TRS) has been significantly extended to cover a wider range of trusts. Trustees should make sure that they understand the new rules and register trusts as required before the 1 September 2022 deadline.

Trust Registration Service (TRS)

The Trust Registration Service (TRS) was introduced in June 2017 as part of the UK’s Money Laundering regulations. It requires trustees to report information to HMRC about the trust, trustees, trust assets (for taxable trusts), beneficiaries and other parties associated with the trust. There is also a requirement to keep this information updated for any changes, with the exception of changes to the trust assets.

Previously, only trusts which paid certain taxes in the UK had to register, these should already be on the TRS and have submitted updates where necessary (within 90 days of any changes, or an annual confirmation by 31 January if there have been no changes).

TRS extended to include express trusts

The extension of the TRS mainly affects dormant and inactive trusts, the requirement to register now covers all express trusts, both UK trusts and foreign trusts with certain UK links, regardless of whether they pay tax in the UK or not. Broadly speaking, an express trust is one created deliberately, either in someone’s lifetime or on their death. The definition of ‘express trust’ is wide-ranging and covers dormant trusts and certain other UK trust arrangements including bare trusts. It’s important to realise that arrangements which you may not consider to be a trust could now fall within these rules – often where a person or persons hold assets on behalf of others. The HMRC guidance is evolving as more information becomes available but it includes lots of examples about the various types of arrangements which will be treated as trusts for the TRS.

The deadline for registering these non-taxpaying trusts is 1 September 2022 or within 90 days for trusts created on or after 1 June 2022.

There are some exclusions (more detail is included via the link below) but most trusts with UK connections, including some non-exempt bare trusts, will need to register on the TRS by 1 September 2022.

Next steps for trustees

Trustees should check the new rules and register trusts as required, as penalties will be charged for late registration of non-taxable trusts. Once the 1 September 2022 deadline has passed, HMRC will write to trustees who haven’t registered and ask them to correct the register. Where a trust does not hold any cash and cannot pay, the responsibility for penalties may fall on the trustees or the settlor. If in doubt, it may be more prudent to register than not to avoid the risk of penalties.

Click here for further details about the registration process and which trusts need to register or are exempt

How we can help you

If you have a trust which meets the registration criteria and should register before 1 September 2022 (or immediately for a non-registered taxpaying trust), please get in touch and we will be happy to help you with the registration process. We can help you at all stages of the TRS, either providing support with full registration, assisting you with claiming, ongoing monitoring and updating, or helping you to negotiate the process yourself.

If you have a dormant trust which Sagars looks after, we will contact you with the different options that are available to you.

If you have any queries, please do not hesitate to contact us by emailing your usual Sagars team member or calling 0113 297 6789.

Caroline Cummings
Caroline Cummings
Senior Tax Manager

Caroline provides expert guidance to a portfolio of substantial trusts, high-net-worth individuals, and families. She is particularly skilled in advising on tax, offshore trusts, trust taxation, tax advisory and trust matters and has experience working with Heritage Maintenance Funds.