There is a requirement for more express trusts to register with the HM Revenue & Customs Trust Registration Service by 1 September 2022.
The Fifth Money Laundering Directive broadened the scope of HMRC’s Trust Registration Service to include all express trusts, subject to a number of exceptions. An express trust is a trust that has been created deliberately by the settlor during their lifetime or by their Will to take effect on death. Examples include:
- Bare trusts – for example opening a bank account in your name for someone else as nominee (other than for a minor child) or using a Declaration of Trust to hold property for someone else
- Discretionary Trusts
- Interest in possession or Life Interest Trusts
- Will Trusts – trusts set up under the terms of someone’s Will
Until recently a trust would only need to be registered if the trust had a tax liability, but non-taxable trusts must also now be registered.
For many trusts the deadline for registration is 1 September 2022. It is the responsibility of the trustees to register the trust by this date.
Please consider carefully whether or not you need to act before this date to register a trust for which you are a trustee.
One of the most common examples of express trusts which must now be registered are Declarations of Trust created in respect of property, for example, where an individual is the sole legal owner of a property and has used a Declaration of Trust to give a share of the property to their spouse.
Please read HMRC’s detailed guidance on registering a trust as a trustee using the link below paying particular attention to the deadlines for registration under the heading “When to register”. The guidance also details the exclusions from registration for non-taxable trusts. It is important to note that all express trusts that met the requirements to register on or after 6 October 2020 must register by the deadline even where they have, or will have, closed or ceased by 1 September 2022.
There are also additional requirements for trustees of taxable trusts already registered to provide additional information required under the extended Trust Registration Service by 1 September 2022 and for all registered trusts to report changes to the information held on the register within 90 days of the change. Please use the link below to access HMRC’s guidance covering this.
It is really important that you consider whether or not you need to take action to register an express trust by the registration deadline. If you would like us to register the trust for you, then this is a service that we offer and our charge for this will start from £300 + VAT for a non-taxable trust and will start from £450 + VAT for a taxable trust.
Please contact Neil Barlow or Graham Mitchell if you have any queries or would like to discuss this further.