Mogers Drewett: All change with the Trust Registration Service?
As part of the continuing global effort to enhance tax transparency, the EU passed The Fourth Money Laundering Directive (4MLD) in 2015. The Directive set out a requirement for Member States to establish a central trust register. Under these regulations, trustees of certain trusts were required to maintain up-to-date records of all the beneficial owners of the trusts, including potential beneficiaries.
Historically, this has meant that only tax paying trusts needed to formally register with HM Revenue & Customs (HMRC) using their online Trust Registration Service (TRS).
All change The Fifth Money Laundering Directive (5AMLD), significantly extends the scope of the TRS, and it is estimated that up to ten times as many trusts will be affected with lots of small or non-tax paying trusts now needing to register who hadn’t previously.
The changes will mean that all express trusts will now need to be registered with the TRS by 1st September 2022 or penalties will be imposed on the trustees.
What needs to be done? The online TRS system, accessed via the Government Gateway, now requires Trustees or their Agent to enter basic details about the Trust, including the persons involved (Settlors, Trustees and Beneficiaries). The TRS must also be updated regularly with any changes to the Trust, for example a change of Trustees.
Exemptions There are some trusts that will continue to be exempt from registration, but the list is small. It includes life policies that are held in trust, Charitable Trusts which are registered as a charity in the UK, or which are not required to register as a charity, and co-ownership Trusts set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’ (but not where anyone else owns an interest in that property).
Trustee Responsibilities If you are a Trustee, you are responsible for registering the Trust with the TRS. Failure to do so is likely to result in penalties being charged by HMRC, so it is important that you are aware of your obligations and make sure you have complied by the deadline of the 1st September 2022.
New Trusts will have 30 days in which to register with the TRS. Once registered, Trustees will have 30 days from when they are made aware of any changes to update the details.
Next steps If you are unsure whether you need to register a Trust or you would like our assistance in registering the Trust with the TRS then please contact Hannah Welbourn on 01225 750000 or email email@example.com
We have a specialist trust team at Mogers Drewett, and can advise on all aspects of trust law, from creation to winding up, and providing ongoing assistance with trust administration.