Trust Registration – do you need to register your trust?
By 1 September 2022, all UK trusts and certain offshore (non-UK) trusts which are not specifically excluded or registered elsewhere in the European Economic Area (EEA) will need to be registered with the UK Trust Registration Service. This includes:
1. All express UK trusts with a UK tax liability
2. Non-excluded express UK trusts* without a tax liability
3. Non-UK trusts if they have a UK tax liability from UK income or directly hold UK assets.
4. A non-UK express trusts which has at least one UK resident trustee and:
- enters into a business relationship** within the UK (on/after 6 Oct 2020); or
- acquires an interest in land in the UK (on/after 6 Oct 2020).
5. A non-UK express trust which has no UK resident trustees, and the trustees directly acquire an interest in UK real estate (on/after 6 Oct 2020), where the trustees are registered at the Land Registry as the legal owners.
Of particular interest will be nil rate band trusts and bare/nominee trusts such as where shares or property interests are held as nominee.
New trusts must register within 90 days of the trustees becoming liable to pay UK tax or becoming registrable. See key dates timeline below:
- 1 September 2022 – Trusts that are already registered will need to provide additional information.
- 1 September 2022 - Trusts which are not already registered but now required, must register (or within 90 days of creation or satisfying the conditions for registrations).
- Within 90 days – The register must be updated if any information changes for example change to trustee or beneficiary.
- 5 October 2021 - If a trust became liable to income tax before 6 April 2021 it should have been registered by this date.
Not registering or late filing could result in penalties from HMRC.
There are exemptions for non-taxable UK and non-UK trusts, generally where they are already registered elsewhere or are considered low risk. The exemptions do not apply to taxable trusts.
There is no general exemption for bare trust / nominee situations. These arrangements will be required to register, subject to the exemptions below. However, there is a helpful exemption for bare trusts for jointly held property where one of the owners is under 18, and trusts created in the course of setting up a bank account for minors or vulnerable persons will be excluded from registration.
The full list of trusts not required to register can be found on GOV.UK.
What you need to do?
Our advisors will be touch with you should you fall into any of the above criteria. However, if your circumstances have changed and you now believe you fall within this criteria, then get in touch with our tax team today (firstname.lastname@example.org).
*An express trust is defined as a trust that is deliberately created usually in writing or verbally. This is different from an implied or constructive trust.
**Business relationship means any business, professional or commercial relationship between the trustees and a UK service provider. This applies only to business relationships entered into from 6 October 2020, when the regulations came into force. Naturally, this includes legal advisors, accountants and tax advisors (such as Sopher + Co LLP).
Should you wish to discuss anything in more detail please contact Emma Cottrell, Director. Alternatively, you can complete our online contact form, email us at email@example.com or call 020 8207 0602.