Olivia Foster, in our Commercial Property team, explains which trusts need to register under the Trust Registration Service.
All UK express trusts (save for certain exemptions such as co-ownership trusts, charitable trusts and UK registered pension schemes) and some non-UK express trusts must be registered with the Trust Registration Service.
On 17 May 2021, HM Revenue & Customs (HMRC) produced further guidance to help establish which trusts fall into these categories.
If either a UK or non-UK trust have a UK tax liability arising from UK income or UK assets they are now required to register with the Trust Registration Service, even if they are not required to register as a registerable express trust. This can include payment of:-
- Income Tax
- Capital Gains Tax (CGT)
- Inheritance Tax (IHT)
- Stamp Duty Land Tax (SDLT)
Therefore, trustees that are obliged to register with the service, should thereafter ensure information held on Trust Registration Service is up to date. The conditions for registration, and the information required, are different depending on whether the trust is a registerable express trust or registerable taxable trust.
Moreover, personal representatives of estates might have to register the estate in certain circumstances where they need to complete and submit a return for the administration period following a death.
All trusts registering on Trust Registration Service must provide the following information:-
- Trust details
- Trustee details
- Settlor details
- Beneficiary details
- Individuals or businesses who have control over the trust
- Reporting a controlling interest in a non-European Economic Area entity
- Recording assets for a registerable taxable trust
- Mental capacity
Registerable taxable trusts set up prior to 6 April 2021 are required to register with Trust Registration Service by 31 January (or 5 October in some cases) following the end of the tax year in which the trust had a liability to UK taxation.
Registerable express trusts are required to register with Trust Registration Service by 10 March 2022, albeit HMRC has announced this may be extended.
Whilst there is yet to be any financial penalty for failure to register the service, HMRC has announced that letters will be sent to the trustees and there is a proposed penalty of £100 per offence for subsequent offenders.
For further information or legal advice, please contact firstname.lastname@example.org or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.