With everything that’s going on around us at the moment, from the hikes in petrol and food prices, to train strikes and airport chaos, we are doing our best here at Anvoner Law to help our clients through what are sometimes complicated administrative processes, with as little stress as possible, particularly regarding a situation that some of you might find yourselves in relating to Registering A Trust.
If you are a Trustee, or you administer or benefit from a Trust, it’s important that you understand how the introduction of the UK Trusts Register may affect you and your Trust.
The Trust Register is now the only way that Trusts can be notified to HMRC for self-assessment purposes. It is imperative that Trustees of all new and existing Trusts (whether UK based or offshore) assess whether they fall within the registration requirements and take action accordingly.
The Trust Register was introduced in June 2017 and at that time trusts were only required to be registered where there was a UK tax liability, such as required to pay Income tax, Capital gains tax, Inheritance Tax or Stamp Duty Land Tax. However, in October 2020 new legislation was introduced to capture all trusts, regardless of whether they have a UK tax liability or not.
If a Trust has a UK Tax liability and has not previously been registered with HMRC, it must be electronically registered within 90 days of creation or two years of death if a Will Trust.
A Trust which does not have a UK tax liability and was in existence on or after 6th October 2020 must be registered before September 2022. After September 2022 the trust must be registered within the same deadlines as the trust with a UK tax liability.
Many common types of trusts are now required to be registered including Discretionary Trusts and Bare Trusts, although there are some exceptions, and responsibility for registering the trust falls with the Trustees.
The information below details the registration process, but if you are unsure about whether this affects you or what steps you need to take then please contact us for further advice.
You can put your trust in us – we’re aways here to help.
REGISTERING YOUR TRUST
If you’re a trustee, or you administer or benefit from a trust, it’s important that you understand how the introduction of the UK Trusts Register may affect you and your trust.
The Trust Register is now the only way that trusts can be notified to Her Majesty’s Revenue & Customs (HMRC) for self-assessment tax purposes. It is imperative that trustees of all new and existing trusts (whether UK based or offshore) assess whether they fall within the registration requirements and act
accordingly. The Register was introduced in June 2017 and at that time trusts were only required to be registered where there was a UK tax liability. In October 2020 new legislation was introduced to capture all trusts, regardless of whether they have a UK tax liability.
If a trust has a UK tax liability and has not previously been registered with HMRC, it must be electronically registered within:
• 90 days of creation
• Two years of death if a will trust.
A trust which does not have a UK tax liability must be registered before September 2022. After September 2022 the trust must be registered within the same deadlines as the trust with a UK Tax liability (within 90 days of creation or within two years of death if a will trust). Responsibility for registration falls with the trustees.
The information required by HMRC covers the trust itself, its beneficial owners, and any potential beneficiaries:
Trust Details
• The full name of the trust
• The date on which the trust was set up
• A statement of accounts for the trust, describing the trust assets and identifying the value of each category of the trust assets at the date of settlement
• The trust’s tax residence
• Where the trust is administered
• The trustees’ contact address
• The full name of any advisers acting on behalf of the trustees for their tax affairs.
Beneficial Owners & Potential Beneficiaries
• Full name
• Date of birth
• The nature of the individual’s role in relation to the trust
• National Insurance Number or unique taxpayer reference (if any).
For individuals without a National Insurance Number or unique taxpayer reference, you must provide their usual residential address. If this address is not in the UK, you must also include the number, country of issue and expiry date of their passport or identification card. If the individual does not have either a passport or identification card, you must include the same details for any equivalent form of identification.
The beneficial owners of a trust include a wide group of people, including:
• The settlor
• Trustees
• Named/ascertained beneficiaries
• If there are no names/ascertained beneficiaries, then the class of people in whose main interest the trust is set up or operates
• Protectors, enforcers, guardians, appointers and anyone else who has a power to:
• dispose of, advance, lend, invest, pay or apply trust property
• vary or terminate the trust
• add or remove a person as a beneficiary or to or from a class of beneficiaries
• appoint or remove trustees or give another individual control over the trust
• direct, withhold consent to or veto the exercise of the four powers mentioned immediately above.
Trustees or their agents can register a trust using the UK ‘Government Gateway’ facility after setting up a Government Gateway account online. This is yet
another layer of compliance for trustees to consider alongside their many other responsibilities.
Trustees must maintain accurate and up-to-date written records of the beneficial owners of the trust and of its potential beneficiaries. Trustees of registered trusts must notify HMRC if details they have supplied (apart from asset values) change during years when the trust is taxable.
Further information on the TRS can be found at www.gov.uk/guidance/register-a-trust-as-a-trustee