Which trusts need to be registered?
Any trust that is considered to be an ‘express’ trust that was in existence on or after 6th October 2020 (this also includes a number of non-UK express trusts). The term ‘express’ trust covers all trusts that have been deliberately created by a settlor, either by Deed, Will or Declaration of Trust. Those trusts which arise under a Will where the testator (the person making the Will) has died and the Trust created by the Will continues beyond two years of their death, will also need to be registered.
The following trusts must register with the Trust Registration Service unless excluded elsewhere:
- New trusts created after 6th October 2020 regardless of the value held.
- All trusts that have a UK tax liability such as income tax, capital gains tax, inheritance tax or SDLT.
- Trusts of property held for a surviving spouse under a Will (once the initial two year period has expired).
- Bare Trusts – investments eg. stocks and shares held on trust for the benefit of a minor child. Trusts created in the course of opening a bank account for a minor child or person lacking mental capacity are excluded from registration as express trusts.
- Co-ownership Trusts where there are different legal owners/trustees to beneficiaries eg. two people holding a house for themselves and another person.
Trusts that are excluded from registration include but are not limited to the following:
- Deceased estates and trusts – those created on death and are distributed within two years. If the trust assets have not been distributed two years from the date of death, the trust must register at that date.
- Trusts for vulnerable beneficiaries – bereaved minors and Disabled Persons Trusts. This includes a bank account for someone lacking mental capacity.
- Bank accounts for minors – where a bank account for a child under the age of 18 has been set up by their parent.
- Property Ownership Trusts – where property is held jointly and the trustees and beneficiaries are the same persons.
- Trusts holding life Insurance or retirement policies that only pay out on death, terminal illness or on disability. Single life insurance premium bonds held in trust are not excluded.
- Charitable Trusts
- Co-ownership Trusts where the legal owner and beneficial owner are the same; typically where a house is owned by two people.
- UK registered pension schemes
- Pilot Trusts – those created before 6 October 2020 and hold less than £100. Any trusts created since that date, no matter the value held are not excluded from registration.
Who is responsible for registering the trust with the Trust Registration Service?
The legal responsibility for registration and providing updates lies with the trustees. The trustees can appoint a lead trustee to complete the registration process or may alternatively appoint an agent to register the trust on their behalf eg. accountants and solicitors.
What information is required to register a trust?
The process is completed online and trustees will need to apply for an “organisation” Government Gateway account to obtain a Unique Taxpayer Reference (UTR). https://www.access.service.gov.uk/login/signin/creds
Details of the information required include:
- The name of the trust
- The trust address and telephone number
- The date the trust was established
- The country where the trust is resident
- Details of the trust assets, including addresses of properties and an estimated market valuation of assets held at the date that the assets were settled
- Identity details (ie. name, address, date of birth and NI of the settlor, trustees, beneficiaries (or class of beneficiaries) and any person exercising effective control over the trust such as a protector or appointor.
The information held on the Trust Registration Service can only be shared by HMRC with law enforcement authorities in the UK or in another EEA member state if requested.
Penalties
Failure to register a trust can lead to financial penalties although as the process is new, it is believed that HMRC will be more lenient for first or inadvertent failures.
Any trusts created after 1st September 2022, the Trustees will have 90 days in which to register with the Trust Registration Service.
Thinking of creating a trust?
If you are thinking of creating a trust and would like advice as to which type is right for your circumstances, Sophie Wales, our Trust specialist is here to help. Sophie has extensive experience in trust creation both via wills and during a settlor’s lifetime which include trusts such as Discretionary and Disabled Person’s Trusts. Sophie can be contacted on 01926 354704 or via email: SophieW@moore-tibbits.co.uk.
If you need assistance in registering a Trust, please call our team or for further information, please click here: https://www.gov.uk/guidance/register-a-trust-as-a-trustee
