The UK Trust Registration Service (TRS) came into being in 2017 as part of the UK implementing an EU anti-money laundering directive. Each EU member state has a similar register. The UK agreed to maintain the TRS as part of the Brexit Withdrawal Agreement entered into with the EU.
The TRS was designed to provide a single point of access for trustees and their agents to register trusts and once registered, update any changes in their details online.
Originally, only trusts deliberately created and which incurred certain UK tax liabilities were required to register. On 2 September 2021, the UK Government announced that certain other trusts would be required to register and set out the deadlines by which they would have to do so.
In most cases, it will be clear if a trust will have to register on the TRS, but this is not always the case.
Trustees should always take specific advice based upon the circumstances of their trust but the following outlines the main features of the TRS including the recently announced changes.
Taxpaying Vs non-taxpaying express trusts
If your trust is “express”, you need to decide if it is a “taxpaying trust” or “non-taxpaying trust”.
A trust will be a taxpaying trust if it incurs one of the following UK tax liabilities;
- Income tax
- Inheritance tax
- Capital gains tax
- Stamp duty and stamp duty reserve tax
- Stamp duty land tax (SDLT)
- Land and buildings transaction tax (Scottish equivalent of SDLT)
If none of the above apply, the trust will be a non-taxpaying trust.
Registration for “taxpaying trusts”
The general rules on registration deadlines dates (which should be checked as they can change) are:
- Trusts that are liable for Income Tax or CGT for the first time: By 5 October in the tax year after the one in which the trust starts to receive any income or has capital gains and becomes liable for Income Tax or CGT.
- Trusts that have been liable for Income Tax or CGT previously: By 31 January in the tax year after the tax year in which the trust receives any income or has capital gains and is liable for tax.
- Trusts that are liable for other taxes: By 31 January in the tax year after the one in which that other tax liability was incurred.
Non-taxpaying express trusts
The recently announced changes to the TRS were for non-taxpaying trusts, so the rest of this article focusses on these.
Different rules apply to UK or non-UK non-taxpaying express trusts, so you need to know which type you have. A UK trust is one which is UK tax resident, and a non-UK trust is one which is not.
UK non-taxpaying express trusts created after 6 October 2020 must now be registered unless they fall within one of the categories of registration-exempt trusts mentioned above.
The rules for which non-UK non-taxpaying express trusts created after 6 October 2020 must now register are slightly more complicated and these are explained further below.
Non-UK non-taxpaying express trusts
You only have to register these if they:
- Acquire directly land or property in the UK; or
- Have at least one trustee resident in the UK and enter into an ongoing ‘business relationship’ with an entity in the UK (such as a professional adviser).
TRS registration deadlines for non-taxpaying trusts
The original deadline for these to be registered was 10 March 2022. However, provided they were created from 6 October 2020 or later, these are now:
- 1 September 2022 for all such trusts created from 6 October 2020 to 31 August 2022.
- Within 90 days for new such trusts created after 1 September 2022.
If any trust information which was already on the register on 1 September 2022 needs updating, the update must also be done within 90 days of the change of information occurring.