September may seem far away, but it is not too early for any individual or firm with a trust to be prepared for the key registration deadline for the Trust Registration Service.
Almost every trust, regardless of its size or type, will need to use HMRC’s Trust Registration Service (TRS), including non-taxable trusts by 1 September 2022.
The scheme was originally launched in 2017 and was limited to only certain taxable trusts who were required to register where they incurred a specific tax liability in the tax year.
Now, the TRS is being extended to all express trusts save for a limited number of exempt categories.
This means non-tax paying trusts will now need to register and provide information such as the details of trustees, beneficiaries and any UK land or property held by the trust.
Law firms that have trusts set up must be aware of this deadline and the steps they must take to be prepared for the September deadline.
Failure to register on time could lead to action being taken against a trustee, including potential penalties, so action must be taken if needed.
Which type of trusts now need to register?
From 1 September 2021, the TRS is now open for non-taxable trust registrations. Many trusts will now need to be registered and this includes trusts set up years ago, which may have been forgotten about but still exist.
According to HMRC, this includes:
- All UK express trusts unless they are specifically excluded,
- Non-UK express trusts that acquire land or property in the UK; or
- Have at least one trustee resident in the UK and enter a ‘business relationship’ within the UK.
How to register a trust
Before trusts can be registered by a trustee, they need to have or already hold, an Organisation Government Gateway user ID and password.
Trustees should register their trust online by following HMRC’s guidance.
HMRC recommends that these trustees and their agents get to grips with the TRS system and gather the information required to register well in advance of the deadline.
For expert advice on trust-related tax matters, please contact us.