Don’t miss the trust registration deadline

Trust registration deadline looming - do you need to act?

If you are the trustee of a trust, however small, it's important you check to see if it needs to be registered by 1 September 2022.

The range of trusts that must now be logged with HMRC's Trust Registration Service (TRS) has been significantly expanded with financial penalties for those who don't comply.

This means that up to one million new and existing express trusts could be caught out including virtually dormant trusts with family trustees who remain unaware they need to do anything.

What is an express trust?

An express trust is one that is created knowingly and intentionally, for example when a grandparent leaves money to their grandchildren in their Will.

This means that all trusts, apart from a few exceptions, must now be registered with the TRS, including:

• Trusts of land where the legal owners registered at the Land Registry are different to the owners who derive an interest from the property;
• Trusts which hold an asset like a loan or property for a surviving spouse or other beneficiaries after death;
• Some bare trusts for children - for example, where a parent holds an asset for their minor child - but bank accounts for minors are excluded.

How and when must I register a trust with the Trust Registration Service?

There is an online registration service.

Non-taxable trusts already in existence must be registered by 1 September 2022. Those created after 1 September 2022 must be registered within 90 days.

Once registered, up-to-date records must be maintained including, within 90 days, any change of trustees, birth of a new beneficiary or change of address of any party.

Are any trusts excluded from the new legislation?

Yes, there are some exemptions, but it's best to check with us whether your trust falls into one of the excluded categories. They include:

• Intestacy Trusts;
• Trusts imposed by a court order;
• Pension scheme trusts;
• Charitable trusts;
• Will trusts, within the first two years of death only.

What happens if you fail to register an applicable trust by 1 September?

HMRC says there won't be any financial penalties for 'innocent' failures in the first instance.

It will follow up with a reminder letter informing you of the requirement to register within a certain time frame.

If the necessary action isn't then taken, a fine of up to £5,000 could be imposed for which the lead trustee is personally liable. This means it cannot be paid from the trust's assets.

Get in touch

Our specialist Trust Solicitors can offer you a quick and easy package for £250 plus VAT @ 20% to register your Trust. This will not only bring peace of mind but ensure all your paperwork is in order.

We can also keep your Trust updated on the TRS portal for an additional fee of £125 plus VAT @ 20%

Contact Mary Harty or Klerwi Le Fol-Caraës for more information:

Email: Mary.Harty@wards.uk.com or Klerwi@wards.uk.com

Call: 0117 929 2811