Published December 2021
A key part of being a trustee is making sure that certain legal duties are upheld. Whilst most of these legal duties will be obvious and at the forefront of trustees’ minds, one may have gone under the radar: ensuring that their trust is registered with the Trust Registration Services (TRS).
New rules as part of the UK’s implementation of the Fifth Money Laundering Directive (5MLD) were introduced in October 2020 to extend the scope of trusts that had to be registered to include UK non-taxpaying express trusts (i.e. those deliberately created) and new requirements for some non-UK trusts.
However, there are some notable exceptions, including trusts used to hold money or assets of a UK-registered pension scheme (i.e. an occupational pension scheme) and trusts used to hold life or retirement policies providing that the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare amongst other exceptions. (For a full list consult the government’s website here.
Trustees have until 1 September 2022 to register details of their trust with the TRS and should ensure that they do so with plenty of time to spare. (For trusts created after 1 September 2022, registration must be done within 90 days).
The registration process is detailed by HMRC on the gov.uk website, as well as in the specialist TRS Manual. Nevertheless, the process is fairly lengthy and involves submitting extensive information on the trustees, beneficiaries and settlors.
The trustees will then need to download an extract from the register to confirm that the trust has been registered with the TRS.
Beyond the potential penalties for non-compliance, it may also impact future transactions as lawyers are required to check that the trust has been registered before they can start work.
In light of these changes, trustees should review any trusts that they administer as soon as possible.
Please get in touch our expert trust management team firstname.lastname@example.org for our assistance.