Many people are unaware that most trusts now need to be registered with HMRC, even where there is no tax to pay.
If you act as a trustee or have ever set up a trust, it is important to understand whether you have reporting obligations under HMRC’s Trust Registration Service (TRS).
Failing to register your trust could put you at risk of HMRC penalties and reviewing your position is essential to stay compliant.
What is the Trust Registration Service (TRS)?
The TRS is HMRC’s online register of trusts and was first introduced in 2017 to improve transparency and help prevent money laundering and tax evasion. Initially, only trusts with tax liability had to register.
However, the rules changed in October 2020 and more trusts are now required to register, even if they do not generate income or pay tax.
If a trust falls within these requirements, registration is not optional.
Trustees are responsible for ensuring the trust is registered and that the information provided is accurate and up-to-date.
Which trusts need to be registered?
Most UK express trusts need to be registered with the TRS. These are trusts that have been deliberately created by an individual, often through a trust deed or declaration.
Some examples include:
- Family trusts
- Bare trusts
- Discretionary trusts
- Life interest trusts
- Trusts holding property or investments
Any trust that has a UK tax liability must also be registered and this includes trusts that pay Income Tax, Capital Gains Tax, Inheritance Tax and Stamp Duty tax.
Some non-UK trusts may also need to register, particularly if they own UK land or property or have a relationship with a UK professional, such as a solicitor, accountant or bank.
Are any trusts exempt from TRS?
While many trusts must register, there are certain exceptions and these include:
- Registered charitable trusts
- Certain pension trusts
- Some life insurance trusts
- Will trusts that are wound up within two years of death
However, these exemptions are limited and specific. It is easy to assume that a trust is exempt when it is not and this is why professional advice is valuable.
What are a trustee’s responsibilities?
A trustee has ongoing responsibilities, including:
- Ensuring the trust is registered with HMRC, if necessary
- Keeping details accurate
- Maintaining records of key individuals in the trust, such as trustees and beneficiaries
- Updating the register when there are changes to trustees, beneficiaries or assets
How can we support you?
Many people only discover they have a reporting obligation years after a trust was created.
With early professional support, you can prevent unnecessary penalties and stress from arising.
Our team can confirm whether your trust needs to be registered and handle the entire registration process with HMRC on your behalf.
We will also review any historic or dormant trusts that may have been overlooked and take responsibility for ongoing compliance and updates.
If you act as a trustee, have set up a trust in the past or are unsure whether a trust exists or needs registering, we are here to help.
