Trustees may already be familiar with the need to register a trust with HMRC and to keep up to date the details of the settlor, trustees, and beneficiaries for those trusts where a UK tax liability occurs. From this Autumn more trusts will need to join the HMRC Trustee Registration Service, even where there is no tax liability. Penalties for non-compliance will arise. Here we explain which trusts are affected and what needs to be done.
This change arises from the 5th Money Laundering Directive, the original deadline was March 2021 but due to Covid 19 restrictions will now be Autumn 2022. The registration process will open in Autumn 2021, giving the trustees of existing trusts 12 months to register. Thereafter the deadline for registering a new trust will be 30 days from creation and the same timeframe will apply to updating the details of settlors, trustees, and beneficiaries.
Certain types of trust must register with HMRC when they have a liability to UK tax in respect of:
Registration must take place within 6 months of the tax year end for new trusts (5 October) and for existing trusts 31 January following the end of the tax year when the tax liability arises. In addition, trustees must complete a SA900 tax return and complete q 20 to confirm that the trust has been registered and any changes have also been updated.
Currently a wide range of trusts are excluded from the requirement to register
Which trusts must register in future ?
Trusts which will require registration
Information required and penalties
The trustees will need to provide the register with the name, address, date of birth, country of birth of the settlor(s), each trustee, each beneficiary or class of potential beneficiaries and keep this up to date, within 30 days of any change.
HMRC have not yet confirmed what penalties will apply for non-compliance. It is expected these will be like penalties for non-compliance with self -assessment deadlines, starting at £100 and rising over time.
Professional advisers will not be able to deal with trustees unless they can confirm registration of the trust. While registration is an added burden for trustees, once completed, it should remove the need to complete anti money laundering checks on each party to the trust, using the register to confirm these details instead.
Further guidance on the need to register a particular trust can be sought from LEBC, enquires should be directed to your usual LEBC contact, firstname.lastname@example.org, 0800 055 6585 or use our live chat facility.
Public Policy Director
Please remember, no news or research item is a recommendation or advice to buy. LEBC is not responsible for accuracy and may not share the author’s views. The contents of this blog are for information purposes only and do not constitute individual advice. All information is based on our current understanding of taxation legislation and regulations. The Financial Conduct Authority does not regulate estate planning, tax advice, wills or trusts.Back to News & Views